LONDON, England (Reuters) -- British Prime Minister Tony Blair challenged Iran and Syria on Monday to help stabilize Iraq or face isolation as Washington and London review their strategy in Iraq.

President Bush met Monday in Washington with a commission studying the war and said conditions in Iraq, not politics, would dictate troop levels there.

Blair said a "whole" Middle East strategy that embraced the region's problems was needed to stem violence in Iraq and suggested a "new partnership" was possible with Syria and Iran.

But Blair -- accused by critics of going soft on Syria and Iran -- said Britain's policy was unchanged. Both countries must renounce support for terrorism, and in Iran's case, its nuclear ambitions.

"Just as the situation (in Iraq) is evolving, so our strategy has to evolve to meet it," Blair said in an annual foreign policy speech.

Blair sent his senior foreign policy adviser to Damascus last month to hold talks with President Bashar al Assad. He was the highest level British official to visit Syria in years, marking what diplomats called a thaw in relations.

Blair will give his views on Iraq on Tuesday to a U.S. bipartisan panel that is reviewing policy for the country. Engaging with Syria and Iran on Iraq is an idea favored by some members of the panel, called the Iraq Study Group.

President Bush in the past has spurned talking to Iran and Syria. Speaking to the same panel on Monday, he was cool on the idea of dialogue with them and critical of their support for terrorism and Iran's nuclear plans.

But the prime minister's spokesman said Blair sensed a "recalibration of the American view" on how to deal with Iraq.

That follows last week's mid-term elections in the United States in which the Democrats seized both houses of Congress, largely because of voter anger over the war.

U.S. officials have said they are open to all new ideas on Iraq.

Iran ready to talk

Blair said a broad strategy for the region must start with addressing the Israeli-Palestinian conflict and then Lebanon.

Blair said Iran should be offered a "clear strategic choice": "they stop supporting terrorism in Lebanon or Iraq; they abide by, not flout, their international obligations. In that case, a new partnership is possible."

"Or alternatively they face the consequences of not doing so: isolation." Syria faces the same choice, his spokesman said.

Iran said on Monday it was ready to consider any official U.S. request to hold talks.

"They should officially propose it and then Iran will review it," Foreign Ministry spokesman Mohammad Ali Hosseini told Reuters.

However, diplomats said it would be difficult for the United States and Britain to seek Iranian help over Iraq at the same time as they are pushing for U.N. sanctions against Tehran over its nuclear program.

Australian Prime Minister John Howard, a staunch U.S. ally, said on Monday he was in favor of talking to countries such as Syria and Iran about ending violence in Iraq.

Any U.S. and British overtures to Iran would risk getting mixed up with their dispute over Tehran's nuclear program. U.S. and British officials have said they suspect the program is designed to produce atomic weapons but Tehran insists it is for electricity generation.

A British government source said the Iraq and nuclear issues were separate.

"We are trying to impress on Iran that a stable Iraq is to (its) benefit. The nuclear issue is ongoing and that's got to be addressed separately," the source said.