Visiting US Secretary of State Condoleezza Rice yesterday described Iran as "a central banker of terrorism" and a "troublesome state," calling on the Middle East country to resume negotiations on its nuclear program.

Rice arrived in Sydney, Australia's largest city, overnight and began her first official visit to Australia from Thursday for talks with Australian leaders on topics including Iraq, Iran's nuclear ambitions, Indonesia's development and the recent U.S. -India nuclear deal.

Speaking at a news conference in Sydney after talks with Downer, Rice said, "Iran is a challenge because it is seeking to have a nuclear program that would allow it to develop a nuclear weapon and it's doing that, we believe, under cover of the NPT (nuclear non-proliferation treaty)."

"And it's lied about its activities and therefore is in contradiction to its requirements or its obligations under the NPT," she said.

"It also, of course, is involved as a central banker of terrorism and so ... we have many reasons to be concerned about Iran," she said.

She said she was confident in the process under way in the UN Security Council.

"I'm quite certain that the Security Council will find an appropriate vehicle for expressing again to the Iranians the desire and indeed the demand of the international community that Iran return to negotiations, having suspended the activities that it began in contradiction of its require under the Paris agreement," she said.

She said she appreciated Australia, which had been "stalwart incalling on Iran to find an arrangement that would be acceptable to the international community in terms of its proliferation risk".

"I'm sure Australia will continue to play an active role," she said.