(Note: Livni spoke before Olmert announcement; Jordanian king arrives)

BEIJING, Oct 29 (Reuters) - China could play a crucial role in defusing the Iranian nuclear dispute by backing tougher sanctions against Tehran, Israeli Foreign Minister Tzipi Livni said on Monday during a trip to Beijing.

In a speech at the People's University of China, Livni said pressure needed to be intensified on Tehran before it mastered the means to produce nuclear weapons, and she called on Beijing to add its weight.

"China on this has a crucial role as a member of the Security Council of the United Nations," she said, adding that past efforts to impose sanctions had been diluted by compromise.

"We must rise above national interests or economic considerations and think about the grave implications that a nuclear Iran will have on the stability of the planet".

Livni spoke shortly before Israeli Prime Minister Ehud Olmert announced in Jerusalem that he would undergo surgery for prostate cancer. The foreign minister -- a member of Olmert's centrist Kadima party -- did not mention his condition.

China, the four other permanent U.N. Security Council members -- the United States, Russia, France and Britain -- and Germany are preparing to discuss a possible new resolution that Western powers want to authorise intensified sanctions against Tehran.

China agreed to two earlier rounds of Security Council sanctions against Tehran but, like Russia, has said it fears additional sanctions demanded by Washington and other Western powers would exacerbate tensions.

Iran has shrugged off earlier sanctions, insisting its nuclear programme is peaceful. Livni urged more stringent measures she said would raise domestic pressure on the Iranian government.

"The nature of sanctions can only work if it is, and if they are, concrete, important to the other side and being taken by the international community in consensus," Livni told the audience of students and academics.

Livni said China could also play a positive role in the Israeli-Palestinian peace process by encouraging other Middle Eastern states to come to the table and encouraging what she called "moderates" in the process.

Livni's visit comes in a week highlighting China's growing but still cautious role in the volatile Middle East. Jordan's King Abdullah arrived in Beijing on Monday for a visit that will also address Middle Eastern conflicts.

While keeping solid ties with Israel, Beijing has sought to maintain strong ties with other Middle Eastern states that are traditional partners or supply much of its imported oil.

Iran is China's third biggest supplier of imported crude oil, behind Angola and Saudi Arabia.

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