Iran is not just threatening war. It is actively attacking the U.S. (as documented here previously) and is
allied with America's enemies. Bush's response is to initiate negotiations, as if there was any chance of Iran abiding by them:
NATO officials say they have caught Iran red-handed, shipping heavy arms, C4 explosives and advanced roadside bombs to the Taliban for use against NATO forces.
According to an analysis by a senior coalition official, "This is part of a considered policy" on the part of Iran, "rather than the result of low-level corruption and weapons smuggling."
The analysis says munitions recovered in two Iranian convoys, on April 11 and May 3, had "clear indications that they originated in Iran. Some were identical to Iranian-supplied goods previously discovered in Iraq."
On the other hand, there are those who believe Bush is speaking softly and
carrying a big stick. Fortunately the mullahs have the Democrat party
and the media to undermine any anti-Iran action.