Iran rejected yesterday a proposal by US President-elect Barack Obama that a carrot and stick policy of economic incentives and tighter sanctions might persuade the Iranian government to change its behavior.

Obama also said in an interview with NBC's Meet the Press that the US should ratchet up direct diplomacy as a way to induce Iran to alter course on its controversial nuclear program and cease support for militant groups like Hamas and Hezbollah.

The Iranian government has also expressed interest in more direct talks with the US but has consistently refused to alter its nuclear program as a precondition. It has also rejected past offers of economic incentives by the international community to scale back its nuclear activities. Hasan Qashqavi, Iran's Foreign Ministry spokesman echoed yesterday.