Delivering the opening speech at this year's Munich Security Conference, Yang reiterated that the issue should be solved by peaceful means and called for more dialogue between the parties involved.

"This issue has entered a crucial stage. The parties concerned should, with their overall long-term interests in mind, step up diplomatic efforts, stay patient and adopt a more flexible, pragmatic and proactive policy," he said.

"We hope... that somehow a mutually acceptable formula can emerge," added the minister.

Yang's comments came one day after he said China would not join the United States, France and other Western powers in calling for sanctions against Iran for its refusal to stop enriching uranium.

Speaking in Paris, he said: "This talk of sanctions at this moment will complicate the situation and stand in the way of finding a diplomatic solution."

The United States and its allies fear Iran is using an uranium enrichment drive to secretly develop fissile material for nuclear weapons. Iran says it only wants to produce fuel for a peaceful nuclear energy programme.

"We believe that Iran, on the basis of IAEA (International Atomic Energy Agency) rules, has the right to peaceful use of nuclear energy and we believe this issue should best be solved through diplomatic means."

The three-day Munich Security Conference, which runs until Sunday, involves around 300 top military, diplomatic and political figures. It is the first time that a Chinese foreign minister has attended.

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