China is seen as having closer ties to Iran than Western nations
Iran's foreign minister has said it is closing in on a deal with world powers over its nuclear programme.
In Germany, Manouchehr Mottaki said a deal to send enriched uranium overseas in exchange for nuclear fuel could be reached in a "not too distant future".
China, opposed to imposing new sanctions against Tehran, said talks with the international community had reached a "crucial stage".
But western ministers reacted with scepticism to Mr Mottaki's comments.
German Foreign Minister Guido Westerwelle said, in remarks quoted by Reuters news agency: "Our hand is still reaching out towards them [Iran]. But so far it's reaching out into nothingness."
And the US National Security Adviser, General James Jones, warned of tighter sanctions and deeper isolation for Iran.
The US and its allies fear Iran is attempting to develop nuclear weapons. Iran insists its nuclear programme is peaceful in purpose.
The BBC Tehran correspondent Jon Leyne, reporting from London, says the strong suspicion is that the Iranian remarks are just another attempt to fend off new sanctions being proposed by the United States.
Mr Mottaki made his comments after deciding to join the Munich conference - a major international gathering of security officials - at the last minute.
He told a late-night audience that "conducive ground" on a nuclear fuel deal had been reached.
"Under the present conditions that we have reached, I think that we are approaching a final agreement that can be accepted by all parties," he said.
"[The] Islamic republic of Iran has shown it is serious about doing this, and we have shown it at the highest level," he said.
But Mr Mottaki did not mention the key issue of timing and insisted that the quantity of fuel involved should be up to Iran.
In January, diplomats said Iran had informed the International Atomic Energy Agency (IAEA) that it did not accept the terms of a deal agreed in October by Iran, the IAEA and the so-called P5+1 - the US, Russia, China, UK and France plus Germany.
NUCLEAR FUEL CYCLE
Mined uranium ore is purified and reconstituted into solid form known as yellowcake
Yellowcake is chemically processed and converted into Uranium Hexafluoride gas
Gas is fed through centrifuges, where its isotopes separate and process is repeated until uranium is enriched
Low-level enriched uranium is used for nuclear fuel
Highly enriched uranium can be used in nuclear weapons
In response, the US, Britain and France have been pressing for more sanctions and earlier this week circulated a discussion paper on further possible measures against the country.
The move came despite recent comments by Iran's President Mahmoud Ahmadinejad indicating that the country would have "no problem" sending much of its low-enriched uranium abroad so it could be processed into fuel - an arrangement envisaged by the October agreement.
Western diplomats reacted warily to Mr Ahmedinejad's comments.
But China's Foreign Minister Yang Jiechi told the Munich conference that the P5+1 should remain patient and keep pursuing a diplomatic solution to the issue.
"The parties concerned should, with the overall and long-term interests in mind, step up diplomatic efforts, stay patient and adopt a more flexible, pragmatic and proactive policy," he said.
"The purpose is to seek a comprehensive, long-term and proper solution through dialogue and negotiations."