CRAWFORD, TEXAS (CNN) -- U.S. President George W. Bush and German Chancellor Angela Merkel say they will continue to pursue a diplomatic solution to Iran's nuclear program.

Speaking at Bush's ranch in Crawford, Texas, Merkel said she and Bush agreed the Iranian issue can be solved through diplomatic means. The next step, she said, will be a UN Security Council resolution.
If talks with Iranian representatives and Javier Solana, foreign policy chief for the European Union, are unsuccessful, Merkel said, ""further steps will have to be made."" Those might include further sanctions, she said.
Bush said, ""What the Iranian regime must understand is, we will continue to work together to solve this problem diplomatically.
""What the Iranian people must understand is, we respect their heritage, we respect their traditions, we respect their potential.""
Asked what will be done if diplomatic efforts are exhausted, Bush told a reporter he ""didn't feel comfortable"" answering a ""hypothetical.""
However, Merkel said, ""I'm deeply convinced diplomatic possibilities have not yet been exhausted. We can solve this by using diplomatic means, and also we want to solve this by diplomatic means.""
Both leaders said any Security Council action will require the support of China and Russia.