Ambassador Wang Guangya, who presides over the 15-member Security Council this month, would not comment on whether China would veto a Chapter 7 resolution, which Western diplomats have said they will introduce next week.

However, he reiterated the need to find a diplomatic solution to the crisis and said the International Atomic Energy Agency (IAEA) was the organization most capable of ensuring that Iran complies with the Non-Proliferation Treaty (NPT).

"If you introduce a resolution not to reinforce the IAEA but to replace it, that is dangerous," Wang told reporters following a talk at the University of Chicago.

"The Iranians are already saying that if this issue is being discussed under Chapter 7, they will drop the NPT like the North Koreans," he said.

Wang said the Security Council could be used to put pressure on Iran to fully cooperate with IAEA inspectors, but said that China, while "concerned," does not characterize the situation as a threat to international security.

A Chapter 7 resolution is invoked to deal with "threats to peace, breaches of the peace, or acts of aggression" and is binding on all UN member states.

"This is a technical issue and I don't think the Security Council as a political organization would be capable of doing this job," he said.

Responding to comments by US President George W. Bush that the international community must present a "common voice" to put pressure on Tehran, Wang said the international community was "united" in its concern but not in the solution.

"Now people are talking about economic sanctions or possibly military actions. If this is being considered I think it will make the effort for a diplomatic solution more difficult," he said.

"We have to work together not to let the situation get out of control because Iran is in a region that is already full of problems... if not handled well the Iranian issue might add fire to the whole region."

On Friday the IAEA confirmed that Iran had not complied with a Security Council demand to freeze enrichment -- which can be used to make fuel for civilian nuclear reactors, but can also serve as the explosive core of atom bombs.

Iran insists its programme is peaceful and on Saturday Iran's hardline President Mahmoud Ahmadinejad vowed never to give up his country's disputed nuclear drive.

Wang said there while there are strong suspicions, there is still no proof that Iran intends to develop nuclear weapons.

"If one day Iran is proved to be in possession of nuclear weapons China will be among the first to condemn it. We will never accept it."

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