By Fredrik Dahl TEHRAN, Nov 13 (Reuters) - Iran and China vowed on Tuesday to boost ties that Beijing believes will help preserve regional and international peace, official Iranian media reported. The two countries' expression of interdependency are likely to irritate Western powers seeking tougher sanctions on oil-rich Iran over its atomic ambitions. Visiting Chinese Foreign Minister Yang Jiechi held talks with Iranian President Mahmoud Ahmadinejad, whose country has repeatedly refused to heed U.N. demands to halt nuclear activities which Washington suspects is aimed at making bombs. China, which can veto further U.N. sanctions, gets about 12 percent of its oil imports from Iran and seeks more. "Enemies of the two nations must know that high-ranking Iranian and Chinese officials are determined to expand their bilateral ties and nothing can distort this friendly relation." Ahmadinejad told Yang, Iran's official IRNA news agency said. It quoted Yang as saying: "Expansion of ties with Iran has great importance for China's government ... Improving Iran's and China's relations could be helpful in protecting regional and international peace, stability and security." In Beijing, China's Foreign Ministry said sanctions were not the way to resolve the international confrontation over Iran's nuclear work while also urging Tehran to be more flexible. Yang described Iran's cooperation with the U.N. International Atomic Energy Agency as positive, IRNA said. SOARING TRADE In Vienna, diplomats said the U.N. nuclear watchdog is likely to report this week that Iran has improved cooperation with an inquiry into shadowy atomic activity but that it remained unclear whether it was enough to resolve key questions. The United States and its allies accuse Iran of seeking to develop atomic weapons but Tehran says its nuclear programme is aimed at generating electricity so that it can export more oil. Britain, France, Germany, the United States, Russia and China are expected to meet on Nov. 19 to assess the report from IAEA chief Mohamed ElBaradei as well as one from the European Union's top diplomat, Javier Solana. A Western diplomat at the United Nations said last week China did not want punitive steps that would hurt its economic relations with Iran. The diplomat said China, not Russia, was now the chief obstacle to tough sanctions. Iran is defying two U.N. Security Council resolutions since December which imposed mild sanctions. Iranian analyst Saeed Laylaz said China's trade with Iran was set to soar to around $20 billion this year from just $200 million in the mid-1990s, partly due to U.S. sanctions which have prompted Iranians to turn from the West to Asia for trade. "Never in the history of Iran have we had such an experience with another country," he said. Iran is selling oil to China while the communist country supplied vehicles and engineering goods to the Islamic state, he said. (Additional reporting by Reza Derakhshi, Beijing bureau and Patrick Worsnip at the United Nations)
