WASHINGTON – Secretary of State Hillary Clinton urged Iran Friday to engage in talks with the United States and other powers on its suspect nuclear activities or pay the price of further isolation and economic pressure.

Clinton made the appeal before she and President Obama consult partners at the UN general assembly (UNGA) next week in New York in preparation for a meeting that will test the waters with Iran.

"We have made clear our desire to resolve issues with Iran, diplomatically. Iran must now decide whether to join us in this effort," Clinton told foreign policy experts at the Brookings Institution.

The five UN Security Council permanent members -- the United States, Russia, China, Britain and France -- plus Germany are due to take part in preliminary talks with Iran's top nuclear negotiator Saeed Jalili on October 1.

Clinton warned that Iran, which the US and other Western nations fear is secretly developing nuclear weapons under the guise of its civilian nuclear power program, would face further sanctions if it shies away from talks.

She said there would be "accompanying costs" for "Iran's continued defiance," citing "more isolation and economic pressure, less possibility of progress for the people of Iran."

As tens of thousands of Iranian opposition supporters mounted the first major protest in two months, chanting "death to the dictator," Clinton heaped scorn on the regime.

"Since June we have seen the Iranian government engaged in a campaign of politically motivated arrests, show trials and suppression of free speech," she said.

"The Iranian government seeks a sense of justice in the world, but stands in the way of the justice it seeks," the chief US diplomat said.

Meanwhile White House spokesman Robert Gibbs condemned as "ignorant and hateful" new comments by Iranian President Mahmoud Ahmadinejad denying the Holocaust and warned they would only isolate Iran further.

And Susan Rice, the US ambassador to the United Nations, said there were no plans for US leaders to meet with Ahmadinejad at the UN general assembly.

"There is no obvious venue in which that would occur, and certainly we have no meetings or anything of the sort planned," Rice said.

Clinton defended Obama's decision Thursday to scrap plans for a missile shield in eastern Europe, saying his new proposals for a more mobile deterrent of interceptors on warships would do more to secure Europe against the perceived missile threat from Iran.

She insisted the US would "never walk away from our allies." Russia has denied the decision was part of a deal to enlist its diplomatic cooperation against Iran on the nuclear issue.

Clinton said US delegates at the UN general assembly would also focus on building a nuclear-free world, stabilizing Afghanistan and Pakistan, forging Arab-Israeli peace and boosting international development by aiding women.

She said Obama would "emphasize the importance of strengthening the international nuclear non-proliferation regime," when he chairs a meeting of the UN Security Council on the issue next week.

He would also stress the role the Security Council must play in enforcing compliance with non-proliferation obligations, Clinton said.

Another priority for the Obama administration at the UN general assembly is stabilizing Afghanistan and Pakistan, which is a nuclear-armed ally of the United States, as they struggle to repel a resurgent Taliban and Al-Qaeda.

Obama's goal, she recalled, is to disrupt, dismantle and "ultimately defeat Al-Qaeda and its extremist allies and prevent their return to either country."

Clinton added that the August presidential elections in Afghanistan -- which have been marred by allegations of widespread fraud, particularly against incumbent Hamid Karzai, "illustrate the promise and the challenges" there.

"When the next president is inaugurated, we will work to step up the level of international engagement and expectations with that new government in a strong partnership to strengthen governments at all levels," she said.