Plans to enrich uranium in Russia for use in Iran could help break a global stalemate over Tehran's nuclear aims, China's government has said.
Iran will ban snap UN inspections if it is referred to the Security Council
Iran's top nuclear negotiator, Ali Larijani, called the proposals "useful" after talks in Beijing aimed at heading off US and EU calls for UN action.
China, which could veto any sanctions bid in the UN, has urged greater efforts for a diplomatic solution.
Mr Larijani said China and Iran held "similar views" on the nuclear issue.
"We agreed members of the Non-Proliferation Treaty have [the] right to peaceful nuclear energy," he told reporters.
Iran has consistently denied US-led accusations that it is seeking to develop nuclear weapons, insisting its nuclear programme is for producing electricity.
The UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), is meeting in Vienna on 2 February.
IRAN'S NUCLEAR STANDOFF
Sept 2002: Work begins on Iran's first reactor at Bushehr
Dec 2002: Satellites reveal Arak and Natanz sites, triggering IAEA inspections
Nov 2003: Iran suspends uranium enrichment and allows tougher inspections
June 2004: IAEA rebukes Iran for not fully co-operating
Nov 2004: Iran suspends enrichment under deal with EU
Aug 2005: Iran rejects EU plan and re-opens Isfahan plant
Jan 2006: Iran re-opens Natanz facility
It is thought to be split over whether to refer Iran to the Security Council, and UN Secretary General Kofi Annan said the IAEA's latest report on Iran might not be ready until March.
In Beijing, Chinese foreign ministry spokesman Kong Quan said the threat of "arbitrary sanctions" complicates negotiations with Iran.
The Russian suggestion "would be a good attempt at breaking the stalemate", he told reporters.
"We oppose impulsively using sanctions or threats of sanctions to solve problems.
"We hope the concerned parties can take practical measures to ease tensions."
The Russian plans would limit Iran's ability to covertly produce fissile material for possible use in a nuclear weapon by carrying out uranium enrichment in Russia.
Few details have been released about the Russian proposals.
Ali Larijani travelled to China from Russia, where talks were "positive"
Iran is thought to be keen that its own scientists are involved in enrichment.
Russia, meanwhile, has previously said any spent nuclear fuel must be returned to Russia for reprocessing.
Early next week, ahead of the Vienna talks, foreign ministers of the five permanent members of the Security Council plus Germany will meet in London to discuss their strategy.
US Deputy Secretary of State Robert Zoellick, also visiting China this week, said he had China that allowing the spread of nuclear weapons in the Middle East, the centre of global oil supplies, would be extremely dangerous, the Associated Press reports.
Iran is a major supplier of oil to China's fuel-hungry economy.