WASHINGTON, Aug 19 (Reuters) - Republican Party foreign policy expert Sen. Chuck Hagel is calling for the United States to open talks with Iran's new president and has dismissed President George W. Bush's talk of a military option against Tehran as an empty and foolish threat.

In an interview with Reuters during a trip across his home state on Wednesday, Hagel said the United States should greet the new Iranian President Mahmoud Ahmadinejad with a bold diplomatic stroke.

"You've got a new president, a new opportunity to do something bold here. Why not take that opportunity and do something bold? Iran is going to be a major influence in the future of Iraq. It already is. Who are we kidding when we think that they're not? They are.

"I would start engaging with American face-to-face dialogue. We're not at negotiations yet, but opening that dialogue. This is a process. This needs to work. Every side has to give something here," said Hagel, who is a member of the U.S. Senate Foreign Relations Committee and is seen as a possible Republican presidential candidate in 2008.

In an interview with Israeli television last week, Bush said "all options are on the table" if the Iranians refuse to comply with international demands to halt their nuclear program, and noted that he has already used force to protect U.S. security.

EMPTY THREAT

Hagel's response to that implied threat was completely dismissive.

"Quite frankly, what is the military option, what are we talking about here? We lose credibility in the face of the world when we say things like, 'Well just don't forget what happened to Iraq could happen to you Iran. We could invade you, we could bomb you.'

"Oh come on now. First of all, where are we going to get the troops? Who's going to go with us? Where are our partners going to be with Iran?"

The United States has been working through its allies, France, Britain and Germany, in an effort to persuade the Iranians to freeze their nuclear program. This week, the Iranians resumed operations at their uranium conversion facility at Isfahan.

Hagel, who has also been highly critical of the Bush administration's Iraq policy and would like to see Washington end its embargo of Cuba, said the current policy of working through surrogates made no sense.

"I don't understand how we think we're going to make progress by staying on the outside using surrogates, our allies France, Britain and Germany, to go to the table and work with them while stand back and don't want to get our hands dirty," he said.

"You need to move towards something and what are we moving towards here? I don't see where we're moving towards anything. In fact, I think we're eroding a base of strength that we still have here. We have got to get inside this thing, because this is a very dangerous problem," Hagel said. "I think we're actually losing altitude, I think we're actually making it more dangerous."