By Susan Heavey and Jeff Mason
WASHINGTON, Sept 19 (Reuters) - The White House said on Thursday that President Barack Obama may meet with Iranian President Hassan Rouhani in New York next week but called for "action" rather than words from the new leader, who has sent signals he's looking for a thaw in relations with the United States.
Obama and Rouhani will be in New York to attend the United Nations General Assembly, and speculation has grown that the two leaders might have an encounter.
White House spokesman Jay Carney acknowledged a change in tone between Iran and the West since Rouhani took office and said a meeting was possible, though one was not scheduled.
"It's possible, but it has always been possible," he told reporters. "The extended hand has been there from the moment the president was sworn into office."
Western powers believe Iran is developing nuclear weapons. Tehran says its nuclear program is peaceful and aimed at power generation.
Rouhani, who took office in August, said in a television interview with a U.S. network which aired on Wednesday that his country would never develop nuclear weapons and that he had "complete authority" to negotiate a nuclear deal with the United States and its allies.
But in the second part of the interview with NBC News that aired on Thursday he criticized Israel, which has expressed skepticism about his intentions.
Israel was "an occupier, a usurper government that does injustice to the people of the region," Rouhani said, adding it "has brought instability to the region with its war-mongering policies."
When asked further about Israel, Rouhani also said: "What we wish for in this region is rule by the will of the people. We believe in the ballot box. We do not seek war with any country. We seek peace and friendship among the nations of the region."
Israel said on Thursday that Rouhani's assurance that Tehran would not pursue nuclear weapons was false.
"One must not be fooled by the Iranian president's fraudulent words," Prime Minister Benjamin Netanyahu's office said in a statement.
Israel, thought to be the only nuclear-armed power in the Middle East, is pushing to halt Iran's nuclear advance, and Netanyahu has called Rouhani a "wolf in sheep's clothing."
Still, Rouhani's interview appeared to be the latest signal by the centrist cleric - including a recent letter exchange with Obama - aimed at improving relations between Iran and the West after years of hostility. He also appeared to signal support for the pro-democracy uprisings sweeping across the region.
The White House reiterated that Obama has been open to talks with Tehran since he came into office. It said the change in tone from the new leader was welcome but not enough.
"It has long been the position of President Obama ... that he would, as president, be willing to have bilateral negotiations with the Iranians provided that the Iranians were serious about addressing the international community's insistence that they give up their nuclear weapons programs," Carney said.
"There have been a lot of very interesting things said out of Tehran and the new government, and encouraging things, but actions are more important than words," he said.
OBAMA OPEN TO BILATERAL TALKS
Meanwhile, France's president, Francois Hollande, said he would meet Rouhani on the sidelines of the U.N. General Assembly, the first meeting between presidents of the two countries since 2005.
No American president has met a top Iranian leader since the 1979 overthrow of the Shah and the taking of American hostages at the U.S. Embassy in Tehran.
The Wall Street Journal reported on Thursday that the Obama administration was preparing for high-level meetings between Iranian and U.S. officials at the U.N. gathering next week.
Since his election in June, Rouhani has taken a dramatic shift in tone from the strident anti-Western rhetoric of his predecessor, Mahmoud Ahmadinejad.
But some questions, including Rouhani's stance on the Holocaust, which killed 6 million Jews and spurred the creation of Israel, have remained unanswered. Ahmadinejad had previously questioned the Holocaust before the U.N. General Assembly.
Asked whether he also believed the Holocaust was a myth, Rouhani said: "What is important to Iran is that countries, people in the region grow closer and prevent aggression and injustice."
The Israeli Embassy in Washington, in a post on Twitter, called the interview part of Rouhani's "charm offensive."
Rouhani also appeared to support lifting Iran's internet censorship, saying: "We want the people, in their private lives, to be completely free."
"In today's world, having access to information and the right of free dialogue and the right to think freely is a right of all peoples, including Iranians," he told NBC's Ann Curry, the first Western journalist to interview the new president.
Asked whether that meant Iranians could soon have access to social media websites such as Twitter and Facebook, he said: "The people must have full access to all information worldwide."
As part of that effort, the government plans to set up a commission for citizen's rights in the near future, he added.
Such social-networking websites have played a key role in the recent uprisings that began with the so-called Arab Spring.
Earlier this week, Iranians gained brief access to Twitter and Facebook before a firewall was put back in place. Iranian officials called it a glitch.