DAVOS, Switzerland (Reuters) - U.S. Secretary of State Condoleezza Rice said on Wednesday she believed the nuclear stand-off with Iran could be resolved diplomatically but that Tehran must not be allowed to become a nuclear weapons power.

Secretary of State Condoleezza Rice addresses reporters at the end of her meeting with Swiss Federal Councillor Micheline Calmy-Rey at Zurich Airport in Kloten January 23, 2008. REUTERS/Christian Hartmann

Just one day after getting agreement on a draft U.N. Security Council resolution against Tehran, Rice offered the incentive of a “more normal relationship” and expanded trade if Iran gave up sensitive nuclear work, according to the prepared text of her speech to the World Economic Forum in Switzerland.

“Ultimately, though, we believe that we can resolve this problem through diplomacy,” Rice said according to the text, which was distributed by conference organizers.

“If Iran would suspend its uranium enrichment and reprocessing activities - which is an international demand, not just an American one - then we could begin negotiations, and we could work over time to build a new, more normal relationship,” she said.

Rice said this new relationship could be defined not by fear and mistrust but growing cooperation, expanding trade and exchange, and the peaceful resolution of differences.

In a conciliatory note after weeks of anti-Iranian rhetoric by the Bush administration, Rice said the United States had no desire for Iran to be a “permanent enemy”.

“Iranians are a proud people with a great culture, and we respect the contributions they have made to world civilization,” she said.

But she said Washington had real differences with Iran’s government, from its pursuit of a nuclear weapon to support for terrorism and what the United States sees as Tehran’s destabilizing policies in Iraq.

Rice said that agreement reached between foreign ministers of major powers in Berlin on Tuesday for a third sanctions resolution showed that the world remained united over not wanting Iran to become a nuclear weapons power.

“We will continue to hold Iran to its international obligations,” said Rice.