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China has said talks of fresh sanctions against Iran over its nuclear programme would "complicate the situation" and could derail diplomatic efforts.

Chinese Foreign Minister Yang Jiechi called for more direct talks with Iran instead of sanctions.

Earlier, UN diplomatic sources said the US was circulating a discussion paper outlining suggested further sanctions.

The measures include expanding travel bans and freezing the assets of people connected with the nuclear industry.

Russia later said it was moving closer to the West's view, to an agreement on the need for new economic sanctions against Iran, according to a leading Russian MP.

"On this question, mutual understanding between Russia and its partners in the international arena has clearly increased," Konstantin Kosachyov, head of the international affairs committee in the lower house of parliament and a Kremlin ally, told Russian TV.

The move comes despite the apparent acceptance by Iranian President Mahmoud Ahmadinejad of a deal allowing Iran to send most of its low-enriched uranium abroad in return for research reactor fuel rods. These would to be used in a small research reactor Iran has producing medical isotopes.

Washington has called on Iran to match its words with actions.

Last month, diplomats said Iran had informed the International Atomic Energy Agency that it did not accept the terms of the deal and had instead demanded a simultaneous exchange on its t... >>>