BEIJING China welcomed a nuclear fuel swap deal Iran announced after talks with Brazil and Turkey and urged negotiations over the dispute, but Western powers rejected the deal as too little to halt momentum for sanctions.
Iran agreed on Monday to send some of its uranium abroad, reviving a fuel swap plan drafted by the United Nations with the aim of keeping Tehran's nuclear activities in check.
But Tehran made clear it did not intend to suspend domestic uranium enrichment that Western governments have said appears aimed at giving it the means to make nuclear weapons.
Western powers have said the fuel swap offer promoted by Brazil and Turkey will not be enough to ease their worries about Iran. Israeli Prime Minister Benjamin Netanyahu convened top advisers on Tuesday to assess the deal.
Chinese Foreign Minister Yang Jiechi said he was encouraged. His reaction suggested Beijing and Western powers may part ways on how much weight to give Iran's offer.
"China has noted the relevant reports and expresses its welcome and appreciation for the diplomatic efforts all parties have made to positively seek an appropriate solution to the Iranian nuclear issue," Yang said, according to the Foreign Ministry website (www.fmprc.gov.cn).
Later on Tuesday, Chinese Foreign Ministry spokesman Ma Zhaoxu said his government hoped the nuclear fuel swap agreement "will benefit the process of peacefully resolving the Iran nuclear issue through dialogue and negotiations".
Neither Yang nor Ma said directly whether China believes the Western powers should now rethink their sanctions demands. Both stressed Beijing prefers a negotiated solution to the dispute.
"China has always believed that dialogue and negotiations are the best channel for resolving the Iran nuclear issue," Ma told a regular news conference.
Israeli Trade and Industry Minister Binyamin Ben-Eliezer, a former defense chief, said only more time would reveal if Iran was "continuing to toy with the whole world" or was open to placing curbs on its domestic uranium enrichment.
Iran says its nuclear activities are for peaceful ends.
SLOWING DOWN TALK OF SANCTIONS
China is among the world powers that have been discussing possible new U.N. sanctions against Iran over its disputed nuclear activities. As one of the five permanent members of the U.N. Security Council, it has the power to veto resolutions.
"I think this will slow down talk of sanctions," said Guo Xiangang, a former Chinese diplomat to Iran, referring to the fuel swap announcement.
"I personally believe that with these positive signals from Iran, now China will be less willing to approve of harsh sanctions against it," said Guo, vice president of the China Institute of International Studies, a government think tank in Beijing.
"It's not a big enough step to please the United States and other Western powers, but at least it's a step forward that could open the way to more movement," he added. "I think China will want to see if this concession can now be built on."
Iran is a major supplier of crude to China, the world's second-biggest consumer of oil after the United States, and provided 11.4 percent of China's total crude imports last year.
Dominated by energy shipments, bilateral trade has grown from around $10 billion in 2005 to more than $20 billion last year.
China has kept close bilateral ties with Iran and is reluctant about moving toward new sanctions, but its support is not unreserved. It has backed past U.N. Security Council resolutions criticizing Tehran's stance on nuclear issues.
Beijing's position on the Iran nuclear dispute is also likely to be in focus next week, when senior Chinese and U.S. officials gather in the Chinese capital for wide-ranging talks.
The International Atomic Energy Agency, the U.N. agency that monitors nuclear security, said late on Monday it was waiting for Iran's approval of the plan in writing. An Iranian official in Vienna said Tehran would reply to the agency within a week.
(Additional reporting by Emma Graham-Harrison in BEIJING, Dan Williams in JERUSALEM and Sylvia Westall in VIENNA; Editing by Nick Macfie)