"China urges all sides to use diplomatic means to peacefully resolve the Iranian nuclear issue through dialogue and negotiation," foreign ministry spokesman Qin Gang told reporters.
"This is the best choice and it conforms to the interests of all sides as well as peace and stability in the region."
The spokesman said Beijing would remain in "close consultations" with all parties on the issue.
After weeks of stalling, China on Wednesday participated in telephone talks with Britain, France, Germany, Russia and the United States on how to proceed on the Iran issue over its suspect atomic drive.
The UN Security Council already has slapped three rounds of sanctions on the Islamic republic over its refusal to halt uranium enrichment, which the West and Israel view as a cover to build nuclear weapons.
Iran denies the charges and maintains that its nuclear programme is solely geared toward electricity generation for its growing population.
China, a close ally of Tehran and now its top trading partner as a key buyer of its energy resources, is so far the only veto-wielding member of the Security Council that does not back further punitive action against Iran.
In the past, Beijing maintained a similar stance on sanctions, only to eventually acquiesce to watered-down measures.
Britain's UN Ambassador Mark Lyall Grant told reporters in New York that officials from the six countries "have agreed they will have further discussions of possible measures (sanctions) early next week."
Asked whether China's presence signaled a willingness by Beijing to engage substantively in bargaining over a fourth round of sanctions, the British envoy said: "My understanding is that they have agreed to engage substantively."
