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Time is running out for Iran to avoid sanctions over its nuclear program, a White House spokesman said on Thursday, and Tehran's deadline is still the end of the year for responding to international demands.

"Time is running out. That deadline is the end of the year," White House spokesman Robert Gibbs told reporters in a news briefing.

Iran has resisted a deal with Western powers that would see its low-enriched uranium sent abroad for processing into uranium for making fuel. Gibbs said it was "pretty clear" that the Iranians were backing out of that agreement.

Washington and its allies suspect Iran is secretly using its nuclear energy program to develop nuclear weapons, but Tehran says it is enriching uranium only to generate electricity.

Meanwhile Thursday, German Chancellor Angela Merkel said that Iran was testing the international community's patience over its nuclear program and that further sanctions must be considered if it does not cooperate with the West.

After meeting Brazilian President Luiz Inacio Lula da Silva in Berlin, Merkel said that Brazil, the United States and European powers shared a desire for Iran to show transparency and cooperate with the International Atomic Energy Agency.

"We are pursuing two tracks: on the one hand making Iran offers for a good, common development," she told a joint news conference with Lula.

"But on the other hand, we are also saying if that is not the case - and our patience is being sorely tested - then new sanctions must be considered," she added.