Washington (CNN) -- Secretary of State Hillary Clinton used a foreign policy talk to weigh in on hot button political issues Wednesday, slamming a Florida pastor for his "disgraceful" plan to burn the Quran and strongly criticizing George W. Bush's fiscal record.
Clinton warned about the long-term consequences of rising federal budget deficits, arguing that they will eventually diminish U.S. power and impair America's ability to act effectively in the global arena.
Her remarks came during an appearance before the non-partisan Council on Foreign Relations. It was her second major foreign policy speech there as secretary of state.
Clinton noted that Terry Jones, the Florida pastor, is the head of a small congregation, and said she wished his plans to burn the Quran on the anniversary of the September 11, 2001 terrorist attacks hadn't attracted so much media attention. But sadly, "that's the world we live in right now," she said.
Jones's plans could potentially harm U.S. troops, she asserted, echoing a recent warning from Gen. David Petraeus, the top U.S. commander in Afghanistan.
The pastor's plan doesn't represent broader American views on Islam, Clinton declared. "It's not who we are," she said.
Clinton also slammed Jones's plans on Tuesday night at a State Department dinner in honor of the Muslim holy month of Ramadan.
Jones has so far rebuffed pleas to call off the event, saying radical Islamists are the target of his message.
On fiscal matters, Clinton had harsh words for Bush. Cutting taxes while fighting wars in Afghanistan and Iraq without paying for them was a "deadly combination" in terms of "fiscal sanity," she said.
She said that rising debt poses a national security threat in many ways, and warned that "responsible" authorities on fiscal matters "are not being heard right now."
"There is no free lunch and we can't pretend that there is ... without doing great harm" to the country, she said.
Republicans have tried to turn the tables on Democrats in recent months on the issue of fiscal responsibility, arguing that the administration's fiscal stimulus plans have significantly added to the national debt while failing to effectively restore economic growth.
Clinton also expressed frustration with the treatment of sensitive foreign policy issues in domestic politics, urging a partisan "détente" that cuts "across the partisan divide."
Among other things, she cited the START nuclear arms reduction treaty, which is slated to be taken up by the Senate in September but faces significant opposition among key Republicans.
The treaty has become a "political issue," she said, but "I wish it weren't." The accord is seen in Europe as an important symbol of America's commitment to work with Russia, she said.
Turning to the Middle East, Clinton said she thinks we "have a real shot" at a successful conclusion to the new Israeli-Palestinian peace talks.
Clinton will travel to Egypt and Jerusalem next week for the second round of negotiations.
Last week, she formally reopened the peace talks at the State Department, where, among other meetings, Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas huddled alone behind closed doors for an hour and a half.
On efforts to block Iran's nuclear program, Clinton said the United States believes Tehran "is beginning to feel the full impact" of recently imposed sanctions.
"International financial and commercial sectors are ... starting to recognize the risks of doing business with Iran," she told the Council on Foreign Relations.
Sanctions "are the building blocks of leverage for a negotiated solution," she said. "We will see how Iran decides."
The United States has repeatedly lobbied other nations to step up sanctions against Iran. The European Union, Canada, Japan and South Korea are among those that have done so.
Iran, however, is continuing its uranium enrichment activities in defiance of U.N. Security Council resolutions, according to a report released Monday by the International Atomic Energy Agency.
Iran has rebuffed international demands to halt its uranium enrichment program, saying it wants the nuclear fuel for peaceful uses. IAEA officials, however, have not been convinced.
Clinton said the United States is continuing to support freedom and human rights inside Iran by speaking out against the regime, and by equipping Iranians with the technological tools they need to communicate with each other and spread their views.
"We want to be helpful, but we don't want to get in the way of it," she said. "So that's the balance that we try to strike."
Clinton's speech at the Council on Foreign Relations -- which was followed by a question-and-answer session -- touted what she characterized as the multiple successes of President Barack Obama's foreign policy agenda.
It also detailed a multi-pronged process of how the administration is putting the president's agenda into practice.
Clinton said the president's approach includes strengthening the U.S. economy, "ensuring we have the resources we need," and helping other countries obtain the tools and support they need "to solve their own problems and help solve our common problems."
CNN's Alan Silverleib and Laurie Ure contributed to this report