The Security Council adopted Resolution 1696 on July 31 demanding that Tehran suspend all its uranium enrichment activities by August 31 or face the threat of sanctions.
Tehran missed the deadline and has consistently vowed never to abandon uranium enrichment.
Clearly the Security Council is now going to have to act on the fact that the deadline has passed, Rice said in an interview with the BBC on Wednesday.
She said that Tehran could still return to the negotiations table if it was willing to suspend its uranium enrichment activities.
But the time has come for the Security Council to now consider its next steps under Article 41 Chapter 7 which was what was demanded in the last resolution, she said referring to the article which authorises economic or diplomatic sanctions as punishment for non-compliance.
We will have discussions with our colleagues over the next several days. There will be further discussions, but I do think that the time in which the Iranians can continue simply to ask questions and to stall; that time is gone. If the Iranians wish to enter negotiations, the terms by which that will happen are pretty clear, she said, adding that if the Security Council could not be expected to live up to the obligations that it set out then its own credibility would be severely weakened.
