The window for dialogue over Iran's nuclear programme is closing, the US ambassador to Israel said on Wednesday, insisting that Washington is under no illusions about Tehran's agenda in the talks.

Speaking at Tel Aviv University a week after world powers held a second round of largely fruitless talks with Iran, Ambassador Dan Shapiro insisted Washington would not continue such dialogue forever.

"We don't intend on continuing talks for talks' sake. The window is closing," he told participants attending an international security conference at the university.

"We have no illusions that Iran may be using this to buy time," he said. "It is up to Iran to follow through. The burden falls on Iran to prove it is serious."

Iran and the P5+1 -- Britain, China, France, Russia and the United States plus Germany -- achieved little in two days of intense talks in Baghdad last week except for setting up another meeting in Moscow in June.

Shapiro said there were "significant differences" at the Baghdad talks, but also "a narrow common ground," which the parties would try to build on in the Russian capital.

And he said the threat of military action against Iran's nuclear facilities was still open.

"As we apply all elements of American power to prevent a nuclear Iran, the United States takes no option off the table -- that means a political component, a diplomatic component, an economic component and a military option," he said.

Neither the United States nor Israel has ruled out the option of a military strike, but the administration of President Barack Obama has made clear it favours diplomacy over force at this stage.

Israel has warned repeatedly that its window of opportunity for any pre-emptive military strike against Iranian nuclear facilities is closing rapidly as a result of Tehran's efforts to put the key ones into underground bunkers.

Speaking during the morning, Israeli Defence Minister Ehud Barak said it was crucial to act before Iran reached that point.

"It is impossible to sleep in peace when the Iranians are systematically moving towards the point after which Israel will not be able to do anything about it," he said.

"You don't wait until they acquire the ability, until they build it, deploy it and prepare to activate that nuclear capability -- and only then do you act. Because then it is too late. You cannot act; there is nothing left for you to do," he said.

"The relevant moment in terms of policy is the last moment in which you can do something about the issue. Otherwise it becomes an issue for commentators and historians. And you have to pinpoint that moment responsibly."

Barak said Washington was working on a different timeline than Israel and had different objectives about when to use force.

"It's clear that there are differences in our attitudes, in the tempo of the ticking of the clocks," he said. "It's no secret. Our clock is ticking faster."

Shapiro said Washington would never allow Tehran to reach such a point and insisted that the "harshest sanctions" were yet to come.

But Israeli Vice Prime Minister Moshe Yaalon said there was little sign that the existing sanctions was pushing Iran any closer to abandoning its plans.

"Iran is laughing all the way to the bomb," he said.

"There is no sign that it feels threatened."

Iran, he said, did not appear to believe the West would have the stomach to impose harsher sanctions or mount a military strike to halt its uranium enrichment facilities.

"The main problem is that Iran isn't convinced that the West, led by the United States, is threatening to go all the way, either through sanctions or the military option," he said.

He added that there is no sign that Iran thinks it is faced by clear threat due to high sensitivity over oil prices. "That perception must be changed."

Currently, there is no sign that Iran thinks it is faced by clear front due to high sensitivity over oil prices," he said. "That perception must be changed."

But the US ambassador insisted Washington would never allow Tehran to go nuclear.

"It would simply be too dangerous to let this regime that calls for Israel's destruction ... to acquire a nuclear weapon," he said.

"It would heighten the possibility of letting nuclear weapons fall into the hands of terrorist organisations, it would spark a nuclear arms race, it would collapse the nuclear non-proliferation system.

"And a nuclear Iran would embolden Iran in support of terrorist organisations like Hezbollah, Hamas and other groups -- and threaten freedom of navigation," he said, referring to Lebanon's Shiite militia and to the Palestinian Islamist movement which rules the Gaza Strip.

Shapiro said Washington and Israel both agreed that Iran should stop enrichment, not just enrichment to a high level.

"Exactly like Israel, the United States believes Iran must suspend uranium enrichment," he said, insisting on the necessity for Tehran to "take concrete measures" to prove it was doing so.

"US policy is to prevent Iran getting a nuclear weapon, not to learn to live with it," he said.

The West suspects Iran is seeking to develop a nuclear weapons capability under cover of a civilian programme, but most countries do not believe Tehran has decision to actually build a bomb.

Iran denies any military dimension to the programme.