Beijing urged Iran to cooperate with the UN nuclear watchdog on Wednesday, as US Treasury Secretary Timothy Geithner held talks with Chinese leaders to press sanctions against the oil-rich nation.

But China, which buys 20-22 percent of Iran's crude oil, said it was "not reasonable" to expect it to comply with what it says are "unilateral" sanctions imposed by the United States.

The new US moves, intended to put further pressure on Iran, bar any foreign banks that do business with its central bank -- responsible for processing most oil purchases in the Islamic republic -- from US financial markets.

Washington is "in the early stages of a broad global diplomatic effort to take advantage of this new legislation to significantly intensify the pressure on Iran," a senior US official told journalists in Beijing on Wednesday.

"We are telling them (the Chinese) what's important to us and they are listening."

Geithner's visit, which will also take in Japan, comes amid escalating international tensions over Iran's nuclear ambitions and a day after the United States accused Tehran of "blatant disregard for its responsibilities".

But he was widely expected to encounter strong resistance to the US sanctions, which are designed to squeeze Iran's oil revenues.

China's foreign ministry said Wednesday it hoped Tehran and the International Atomic Energy Agency would "stress cooperation and earnestly carry out the safeguards and clarify pending issues in the Iranian nuclear programme."

However, spokesman Liu Weimin also defended China's oil trade with Iran, saying the Asian giant's energy needs were "reasonable" and should not be linked to the nuclear issue.

"To place one country's domestic law above international law and press others to obey is not reasonable," he said at a regular briefing.

"China's regular demand for energy does not have anything to do with the Iranian nuclear issue and should not be affected."

Geithner was also expected to raise the issue of China's currency when he met Vice President Xi Jinping, who is tipped to take over as president next year, and Premier Wen Jiabao.

Washington argues that Beijing's decision to keep the yuan artificially low fuels a flow of cheap exports that helped send the US trade deficit with China to more than $270 billion in 2010.

"We are looking forward to exploring opportunities to expand our exports to China and strengthen and deepen our cooperation with China on a broad range of economic and strategic issues," said Geithner as he met Xi.

"On economic growth, financial stability around the world, on nonproliferation, we have what we view as a very strong cooperative relationship."

But the sanctions topped the agenda for his visit, which comes in the same week the UN atomic watchdog said Iran had begun enriching uranium to up to 20 percent at a new plant in a fortified bunker sunk into a mountain.

Iran, which insists its nuclear programme is for exclusively peaceful purposes, has repeatedly said it will not abandon uranium enrichment despite four rounds of UN Security Council sanctions demanding Tehran desist.

US Secretary of State Hillary Clinton said Tuesday the confirmation Iran was enriching uranium was "especially troubling", again calling on Tehran to cease all such work.

Russia, which has relatively close ties with Iran, has also voiced concern over the new plant, while European foreign ministers are set to agree on tougher sanctions to force Tehran to abandon its nuclear programme.

Tehran has threatened to block the strategic Strait of Hormuz if oil sanctions are imposed over its nuclear programme, sparking concern in both China and Japan, which depend heavily on Iranian oil.

China said this week Premier Wen would visit Saudi Arabia, Qatar and the United Arab Emirates, as the West's standoff with Iran intensified.

Japan's Foreign Minister Koichiro Gemba, on a Gulf tour to seek assurances over oil supplies, has expressed concern over the recent developments.

Iranian oil accounted for nearly nine percent of Japan's power needs in the first 11 months of 2011 -- an issue that Geithner is expected to discuss with Japanese leaders.

The treasury secretary will hold talks with Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi in Tokyo on Thursday.