China on Tuesday reiterated its calls for diplomatic efforts on the Iran nuclear issue as the United States seeks sanctions against Iran.

"Dialogue and negotiations are the right ways of properly solving the Iran nuclear issue, and there is still room for diplomatic efforts," said Chinese Foreign Ministry spokeswoman Jiang Yu at a regular news briefing.

U.S. Secretary of State Hillary Clinton said Monday the United States had been discussing with other major powers sanctions against Iran after Tehran rejected a year-end deadline set by the United States to accept a deal in which it would swap its low-enriched uranium for nuclear fuel outside Iran, and demanded simultaneous exchange inside the country.

Meanwhile, Iranian Foreign Minister Manouchehr Mottaki said the international community had "only one more month" to decide whether to sell nuclear fuel to Iran or swap nuclear fuel for Iran's low-enriched uranium.

"Otherwise, Tehran will enrich uranium to a higher purity needed for the fuel," said Mottaki.

"This is an ultimatum," he said.

China has insisted that the Iran nuclear issue be properly solved through diplomatic negotiations rather than sanctions.

"We hope the relevant parties take more flexible and pragmatic measures and step up diplomatic efforts in a bid to resume talks as soon as possible," said Jiang.

Under a draft deal brokered by the UN, most of Iran's existing low-grade enriched uranium would be shipped to Russia and France by the end of the year, where it would be processed into fuel rods with a purity of 20 percent.

The higher-level enriched uranium would be transported back to Iran to be used in a research reactor in Tehran for the manufacture of medical radioisotopes.

The United States and its Western allies have accused Iran of secretly developing nuclear weapons under the disguise of a civilian nuclear power. Iran has denied the accusation and stressed its nuclear program is only for peaceful purposes.

The United States has threatened another round of UN sanctions against Iran if it does not abide by the year-end deadline.