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BEIJING, Nov 20 (Reuters) - China urged Iran on Tuesday to abide by U.N. resolutions demanding it curtail nuclear activity but said there was still room to negotiate a solution to the worsening standoff.

China has faced rising calls from Western powers to back stricter sanctions against Tehran, which Washington and its allies say seeks the ability to make nuclear weapons through a uranium enrichment programme.

Iran says it only wants to develop nuclear power plants and has continued enrichment despite United Nations resolutions calling it to suspend such work.

In responding to the U.N. nuclear watchdog's latest report on the dispute, Chinese Foreign Ministry spokesman Liu Jianchao suggested that his country was seeking to balance these rival pressures.

"Iran has not abided by the demands of the relevant United Nations Security Council resolutions and suspended its uranium enrichment activities," Liu told a regular news conference, but noted "some progress" in Iran's dealings with the International Atomic Energy Agency (IAEA).

"China hopes Iran will effectively abide by U.N. Security Council resolutions and strengthen cooperation with the IAEA."

Beijing has allowed two previous rounds of U.N. sanctions against Iran, but also wants to preserve ties with a country that is a major supplier of oil. And Liu again indicated that Beijing would resist any Western push for fresh U.N. sanctions.

"We believe that dialogue and negotiation should be given more time and scope", he said.

"We also hope that the other parties concerned will continue diplomatic efforts to revive negotiations at an early date".

As a permanent member of the U.N. Security Council, Beijing has the power to block or pass such sanctions.

Western officials said China had refused to join Britain, France, Germany, the United States and Russia on Monday to assess a U.N. nuclear watchdog report on Iran's nuclear programme, forcing the meeting's cancellation.

Liu said earlier that China could not attend the meeting due to clashing schedules. At the news conference, he said Beijing would continue consulting other powers about the nuclear dispute. (Reporting by Chris Buckley; editing by Nick Macfie and Roger Crabb)

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