UPDATE 2-China more concerned about Iran, wary on sanctions

(Adds comments from Miliband, details on sanctions)

By Emma Graham-Harrison

BEIJING, March 16 (Reuters) - China has become more concerned about international tensions over Iran's nuclear programme, but remains doubtful that sanctions can resolve the stand-off, the Chinese foreign minister said on Tuesday.

Foreign Minister Yang Jiechi was speaking after talks with visiting British Foreign Secretary (minister) David Miliband, where one of the key issues on the table was Iran.

Yang's comments suggested that he had given little ground on Western calls that Beijing back proposed new sanctions over Tehran's disputed nuclear activities, which China could block as a veto-wielding permanent member of the U.N. Security Council.

"Regarding the Iran nuclear issue, I wish to point out that this issue is the subject of widespread attention in the international community," Yang told reporters.

"China has become more concerned about the current situation," he said, adding that Beijing was still seeking a diplomatic solution.

Western powers say Iran wants the means to make nuclear weapons and has violated non-proliferation safeguards. German Chancellor Angela Merkel said on Monday that the time had come for new sanctions.

Iran says its uranium enrichment activities are to make fuel for planned nuclear power plants.

China has resisted calls to tighten the economic screws on one of its major suppliers of oil, and Yang repeated Beijing's long-standing position that sanctions could not resolve the tensions. But he stopped short of outright opposition.

"I have said before that sanctions do not provide a fundamental solution to the Iranian nuclear issue, ultimately this issue has to be resolved through peaceful negotiations," he said.

"We will continue to make active efforts to bring about a diplomatic solution to the Iran nuclear issue."

"SHARED GOAL"

A draft Western proposal calls for restricting more Iranian banks abroad, but does not press for sanctions against Iran's oil and gas industries. [ID:nN06119565]

At the news briefing, Miliband described tackling Iran's nuclear programme as a "test for all of us" and noted that China had registered its increasing concern.

"We have a shared goal in ensuring that Iran lives by its commitments under the non-proliferation treaty, and we are going to work very closely together to achieve it," he added.

China is one of the five permanent members of the U.N. Security Council, each holding the power to veto resolutions. It backed previous Iran resolutions, after working to cut measures that could threaten flows of oil and Chinese investments.

In 2009, Iran was China's third biggest source of imported crude oil, behind Angola and top supplier Saudi Arabia. Iran supplied China with 23.1 million metric tonnes of crude, or 11.4 percent of China's total crude imports.

While Beijing abstains from Security Council votes on decisions it dislikes, it is much less willing to use its veto and risk diplomatic isolation, especially if fellow Security Council member Russia backs a resolution. (Reporting by Emma Graham-Harrison; Editing by Alex Richardson)