Asked if the military option was still on the table with regard to the Islamic republic, White House spokesman Robert Gibbs said: "The president hasn't changed his viewpoint that he should preserve all his options."
In tackling Tehran's nuclear ambitions, alleged support for terrorism and threats against Israel, Obama believes "we must use all elements of our national power to protect our interests as it relates to Iran," he said.
"That includes, as the president talked about in the (election) campaign, diplomacy, where possible, and that we have many issues to work through," Gibbs told reporters.
The spokesman's remarks followed a fiery speech Wednesday by Iranian President Mahmoud Ahmadinejad, who is running for re-election on June 12.
Ahmadinejad, having earlier congratulated Obama on his election, demanded the new US president apologize for "crimes" against Iran and "stop supporting the Zionists" of Israel.
The outspoken Iranian leader also called on Washington to withdraw its troops from across the world as a proof of Obama's promised policy of change.
In an interview on Monday with Al-Arabiya television, Obama vowed to map out a new future for US relations with Iran after a three-decade diplomatic rupture.
"As I said in my inauguration speech, if countries like Iran are willing to unclench their fist, they will find an extended hand from us," the president said.
"It is very important for us to make sure that we are using all the tools of US power, including diplomacy, in our relationship with Iran."
Britain's Guardian newspaper meanwhile reported that Obama and US Secretary of State Hillary Clinton were drafting a letter to Iran's leadership to set the seal on their promises of diplomatic engagement.
Gibbs shot down the report.
"Neither the president nor the secretary of state has requested nor seen any such letter. That closes the book a little bit on that," he said.
The spokesman added that it was "unclear exactly who" in the Iranian leadership would be engaged by US officials. Ahmadinejad is outranked by Iran's supreme leader Ayatollah Ali Khamenei.
For any talks to occur, "there has to be some preparation and an understanding and respect by both sides," Gibbs said.
State Department spokesman Robert Wood said "nobody from the administration has tasked anyone within the White House, the State Department to draft any letter to the Iranians."
He noted that Obama had ordered a review of US relations with Iran, "and there are lots of ideas that are being bandied about."
"But until that review is completed, we're not going to be able to outline how we're going to go forward with regard to engaging Iran."
Tensions between the two nations have soared over Iran's nuclear drive, which many in the West fear is cover for a secret atomic weapons program. Iran says it is interested only in civilian nuclear energy.
Former president George W. Bush — who famously declared Iran part of an "axis of evil" — refused to talk to Tehran until it stopped enriching uranium.
But Clinton said Tuesday that a US envoy would join multilateral talks in Germany next week on Iran's nuclear program. Wood said "the outcome of that meeting will be factored into the review."
Susan Rice, the new US ambassador to the United Nations, made her debut Monday with a pledge of "vigorous" and "direct" nuclear diplomacy with Iran, while warning of increased pressure if Tehran continues to enrich uranium.
