China urges Iran's cooperation with nuclear agency

BEIJING (Reuters) - China urged Iran on Tuesday to cooperate with the U.N. nuclear watchdog but distanced itself from calls for sanctions following a report that said Tehran was stalling scrutiny of its nuclear activities.

After the report from the U.N. International Atomic Energy Agency (IAEA) on Monday, London and Washington swiftly raised the prospect of fresh sanctions to press Iran to suspend uranium enrichment and cooperate more with inspectors looking into claims Tehran is developing means to build nuclear weapons.

Iran has denied the claims, blamed the IAEA for the impasse and said its nuclear program is for peaceful energy.

"We hope that Iran and the IAEA continue cooperating to resolve the unsettled issues as early as possible," Chinese Foreign Ministry spokesman Jiang Yu told a news conference. "Tensions are not the way to solve these problems."

As a big oil customer of Iran and veto-wielding permanent member of the U.N. Security Council, China has become a focus of diplomatic efforts to overcome the long-running standoff.

China has backed past Security Council resolutions imposing limited sanctions on Iran, but Beijing has been reluctant to consider steps that would threaten energy and economic ties with Tehran.

Iran is China's third biggest supplier of imported crude oil, well behind Saudi Arabia and Angola.

(Reporting by Chris Buckley; Editing by Nick Macfie and David Fox)