"The response however, falls short of the conditions set by the Security Council, which require the full and verifiable suspension of all enrichment-related and reprocessing activities," State Department spokesman Gonzalo Gallegos said in a statement.

"We acknowledge that Iran considers its response as a serious offer, and we will review it," the statement said.

The United States is consulting closely with other members of the Security Council over what the next steps should be, the statement added.

Earlier Wednesday, the White House said that it is carefully reviewing Iran's response.

"We're giving it careful consideration and a careful review, as it deserves," White House deputy spokeswoman Dana Perino told the media.

"The Security Council made clear what its position was, and we're going to parse through and look at their response before responding fully," Perino said.

Perino said on Tuesday that the Bush administration had received a copy of the Iranian response but she did not believe Bush had read it.

"I'm not going to parse the Iranian government's document today here on the airplane. That is a job best left to the diplomats," she said on Tuesday, adding that Bush has made very clear in Monday's press conference that he thought Iran's nuclear program "would be a mistake and dangerous for the region and the whole world."

John Bolton, U.S. ambassador to the United Nations, said on Tuesday that the United States would study Iran's response carefully.

Moreover, "We are also prepared, if it does not meet the terms set (by the six countries), to proceed in the Security Council with economic sanctions," Bolton said.

"I think we will be prepared to submit elements of a resolution in the council very quickly," Bolton added.

Iran's top nuclear negotiator ALi Larijani delivered Teheran's written response on the incentives package on Tuesday to the representatives of the five permanent Security Council members -- the United States, Russia, China, Britain and France, but refused to suspend uranium enrichment, a key demand by the United States and the West.

Washington has accused Iran of trying to develop nuclear weapons under the cover of civilian nuclear programs. Iran has said that its nuclear programs are for peaceful purposes only.