The US chief diplomat told students in Qatar that the United States was not seeking to use military action against Iran to curb its nuclear ambitions but rather seeking to use international pressure through the UN Security Council.
Such pressure "will be particularly aimed at the those enterprises controlled by the Iranian Revolutionary Guard, which we believe is in effect supplanting the government of Iran," Clinton said.
"We see the government of Iran, the supreme leader, the president, the parliament is being supplanted and Iran is moving toward a military dictatorship," Clinton told students at the Qatari branch of Carnegie-Mellon University.
In a speech in Doha on Sunday night to the US-Islamic World Forum, Clinton said: "I fear the rise of the influence and power of the Revolutionary Guard… poses a very direct threat to everyone."
The United States last week imposed a fresh round of sanctions against the Revolutionary Guards and hopes for UN sanctions to target the group blamed for Iran's nuclear programme and alleged support to militants in the region.
"I would like to figure out a way to handle it," she told a conference in Qatar, which lies across the Gulf from Iran.
"Certainly we don't want to be engaging while they're building their bomb," she said.
She told students that her talks with leaders in the region revealed great concern about Iran and its intentions.
"They worry about Iran's intentions. They worry about whether Iran will be a good neighbour" and live peacefully, she said.
"I think people have reason to worry. The question is what can Iran do to allay the fears of its neighbours. And yet I don't see much progress there."
Clinton also said on Monday that she is hopeful that "serious" negotiations between Israel and the Palestinians will begin this year.
"I'm hopeful that this year will see the commencement of serious negotiations" between the two sides, Clinton said.
She added that she hoped for the "kind of breakthrough" people were expecting after President Barack Obama said he would not stay on the sidelines and would actively promote peace between the two parties.
