China on Tuesday reiterated its call for increased diplomatic efforts to solve the Iran nuclear issue.

"China holds that the parties should continue to step up diplomatic efforts in a bid to maintain and promote the process of dialogue and negotiations," said Chinese Foreign Ministry spokesman Qin Gang.

"China hopes the parties demonstrate more flexibility and create conditions conducive to a comprehensive and proper solution to the Iran nuclear issue through diplomatic means," Qin told a regular news briefing.

Qin said China has taken note of an IAEA report on the Iran nuclear issue and hopes "the Iranian side continues to cooperate with the IAEA on related issues."

In a confidential report which was leaked Thursday, the International Atomic Energy Agency (IAEA) said it was concerned about possible activity in Iran to develop a nuclear payload for a missile.

The report confirmed Iran has produced its first batch of 20 percent highly enriched uranium, adding that Iran had failed to give inspectors the required advance notice.

Western powers suspect Iran of attempting to build nuclear weapons. But Tehran says its nuclear program is aimed at generating nuclear energy for civilian purposes.

In an effort to rein in Iran's nuclear program, some western countries have pushed for a fourth round of UN Security Council sanctions.