WASHINGTON (AFP) - Washington shrugged off Tuesday Iran's threat to "set fire" to Israel and the US navy in the Gulf as its first response to any American attack over the Islamic republic's nuclear programme. "Comments like that are not out of the norm and not unusual," State Department spokesman Gonzalo Gallegos said, pointing out that the United States wanted to resolve the nuclear issue diplomatically. "We continue to stress our desire to resolve this issue diplomatically... continue with the process," he told reporters. Meanwhile, US President George W Bush said Tuesday that he and German Chancellor Angela Merkel had discussed their cooperation in the nuclear dispute with Iran at this mountain resort in northern Japan. "We talked about the need to continue to work together on Iran. Angela Merkel is a constructive force for good," Bush said during a joint public appearance after their talks on the margins of a rich nation summit in Toyako, Japan. Merkel did not specifically mention Iran, but said she was "very satisfied" with the Group of Eight summit's work thus far "on the issue of climate change, cooperation in the area of food and oil."