US President George W. Bush said he hoped to resolve the nuclear dispute with Iran with diplomacy, but warned Tehran he would "use military might" if necessary to defend Israel.

"The threat from Iran is, of course, their stated objective to destroy our strong ally Israel. That's a threat, a serious threat. It's a threat to world peace," the US president said after a speech defending the war in Iraq.

"I made it clear, and I'll make it clear again, that we will use military might to protect our ally Israel," said Bush, who was apparently referring to Iranian President Mahmoud Ahmadinejad's call for the destruction of Israel.

On the atomic dispute, Bush said he hoped "to solve this issue diplomatically" with a "united message" to Tehran from Washington, London, Paris, Berlin as well as Russia "hopefully" and China.

The message would be that "your desire to having a nuclear weapon is unacceptable," he said.

Bush also touched on Iran's agreement to discuss Iraq with the United States, saying that "it's very important, however, for the Iranians to understand that the discussion is limited to Iraq.

"We're using this as an opportunity to make it clear about our concerns of interference within a democratic process that is evolving," he said, saying that the talks will not decide Iran's relations with a sovereign Iraq.

"Ultimately, Iraq-Iranian relations will be negotiated between the Iraqi government and the Iranian government," he said.

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