BEIJING — China on Tuesday called on Iran to improve its cooperation with the UN nuclear watchdog, after the agency said in a report that Tehran was pressing ahead with its controversial atomic programme.

"We hope Iran will further step up cooperation with the IAEA and resolve the pending issues at an early date," foreign ministry spokesman Ma Zhaoxu told reporters, adding China "appreciated" the efforts of the nuclear watchdog.

The International Atomic Energy Agency said in a restricted report obtained by AFP that it remained concerned about the true nature of the Islamic republic's nuclear activities, which Tehran insists are peaceful.

The report said Iran was producing higher-enriched uranium and noted indications of "past or current undisclosed nuclear-related activities" including some linked to the development of a nuclear payload for a missile.

China, a close ally of Iran with significant energy interests in the Islamic republic, on Tuesday also reiterated its usual call for further talks to resolve the standoff.

"We hope relevant parties can seize the opportunities, step up diplomatic efforts and seek an early resumption of dialogue and negotiations," Ma said.

A spokesman for the US National Security Council said the IAEA report showed Iran's "continued failure to comply with its international obligations and its sustained lack of cooperation".

The spokesman, Michael Hammer, added that the IAEA report "underscores that Iran has refused to take any of the steps required of it... which are necessary to enable constructive negotiations on the future of its nuclear programme."

The West and Israel fear that Iran's atomic programme is a cover for a nuclear weapons drive, a charge Tehran denies.

Iran -- which could see a fourth round of sanctions slapped on it by the United Nations Security Council later this week -- said the report backed its assertions that its programme poses no threat and is within IAEA guidelines.

Washington has said that all five permanent veto-wielding members of the Council, including Russia and China, have backed a draft resolution on sanctions targeting Tehran.

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