"There is still room for diplomatic efforts," foreign ministry spokesman Ma Zhaoxu told reporters.
"China always believes that dialogue and negotiations are the best way to resolve this issue," he said, after warning that Beijing's cooperation with Washington on international issues could suffer over US arms sales to Taiwan.
His comments came after US Secretary of State Hillary Clinton on Friday upped the pressure on China to recognise the threat from Iran's nuclear programme and join international calls for sanctions.
The United States and its Western allies fear Iran is secretly developing fissile material for nuclear weapons under the cover of its uranium enrichment programme — a charge denied by Tehran.
As a close ally of Iran with oil interests in the country, China — a permanent member of the UN Security Council — is reluctant to support sanctions.
