Pressure was piled on Iran yesterday as Gordon Brown announced new economic sanctions against Tehran and George W Bush insisted "all options are on the table", including military action.

Whitehall was sealed off for a press conference held by the two leaders, in which the frostiness of their first joint appearance last July in America was replaced by a seemingly much warmer relationship with the Prime Minister declaring the US President a "true friend of Britain" and Mr Bush praising Mr Brown for being "tough on terror".

At the end of a so-called farewell tour of Europe, the American leader sought to pin down what he regarded as his legacy when he declared: "One of the things I will leave behind is a multi-lateralism to deal with tyrants so that problems can be solved diplomatically."

The Prime Minister insisted he wanted to maintain a dialogue with the Iranian Government and that it did not have to choose the path of confrontation. He explained how the West's "enhanced offer", including political and economic partnership with help on nuclear technology for civilian use, remained on the table.

However, Mr Brown told reporters that because Iran continued to ignore the offer of partnership - it ruled out suspending uranium enrichment on Saturday - he would work with European allies to take further action against it, including freezing the overseas assets of the country's largest bank. Action would also start on a new phase of sanctions against the country's oil and gas reserves.

"I will repeat that we will take any necessary action so that Iran is aware of the choice it has to make to start to play its part as a full and respected member of the international community or face further isolation," said the PM.

Mr Bush said Tehran had to understand that when the international community spoke "with one voice", it was serious; that was why the Prime Minister's statement was "so powerful".

The US President made clear he wanted to send a "focused message" to Iran and, when asked about military action, stressed that while pressure was needed to produce a diplomatic solution and noted: "Iranians must understand, however, that all options are on the table."

He accepted Tehran had a "sovereign right" to have a civilian nuclear programme but they did not have the "trust" of the West when it came to its desire to enrich uranium - a process that can lead to the production of nuclear weapons - because it had openly declared it wanted to destroy Israel.

However, Alaeddin Boroujerdi, a senior Iranian MP, has made clear Tehran is in no hurry to respond to the West's requests.

Despite reports of unhappiness in the White House over supposed British plans for troop withdrawal in Iraq, the two leaders emphasised how they shared the goal of bringing soldiers home as they were able to hand over security responsibility to local forces.

Praising the UK Government's announcement of more troops for Afghanistan, Mr Bush declared: "He's left more troops in Iraq than initially anticipated and, like me, we will be making our decisions based on conditions on the ground ... without an artificial timetable."

The President insisted history would judge whether the military tactics could have been different in Iraq but he stood by the decision to remove Saddam Hussein as the right one for "our security", for peace and for 25 million Iraqis.

He said it was important to support democracy "at the heart of the Middle East", adding: "It's a democracy that's not going to look like America, it's not going to look like Great Britain, but it's a democracy that will give government responsive to the people."

After his press conference at the Foreign Office, Mr Bush, accompanied by his wife Laura, flew to Belfast, where he met Peter Robinson, Northern Ireland's new First Minister, and Martin McGuinness, his deputy.

Praising the progress that had been made in the region, which was an example to the world, the US President declared: "This a good place for investment. Ultimately, investment will help Northern Ireland reach its full potential."