The delegation, led by Supreme National Security Council deputy secretary Ali Baqeri, visited Beijing as lawmakers in the United States moved to detail punishment of foreign banks that do business with the Iran's central bank, the clearinghouse for its oil exports.
The United States hopes the sanctions will prevent Iran from developing what it says is a nuclear weapons program. Iran says its nuclear program is for civilian use.
"China believes the Iran nuclear issue should be resolved peacefully through dialogues and negotiations, and that sanctions and military means will not fundamentally address the problem," Xinhua said, citing Chinese Assistant Foreign Minister Wu Hailong at the Friday meeting.
Xinhua said the Iranian side "expressed its willingness to resume talks" with six countries involved in discussions and to "strengthen cooperation" with the International Atomic Energy Agency, the UN's energy watchdog.
The US measures could potentially impact China, the largest buyer of crude from Iran, although the law allows an exemption for institutions in countries that have "significantly" reduced their dealings with Iran.
China has halved its imports from Iran in January and February, following a dispute over the terms of payment.
The threat of further sanctions has set off a round of diplomacy, with US Treasury Secretary Timothy Geithner visiting Beijing and Tokyo this month, followed by a tour to Arab states by Chinese premier Wen Jiabao.
Wen made a strong statement during his tour opposing Iran developing and possessing nuclear weapons, but defended China's right to buy Iranian crude oil as normal trade activity.
The Obama administration this month invoked US law to sanction China's state-run Zhuhai Zhenrong Corp, which it said was Iran's largest supplier of refined petroleum products. China opposed the sanctions.
That company does little business involving the United States, but state-owned Sinopec Corp, which processes most of China's Iranian crude imports, has a much larger international presence.
China has in the past consistently urged talks to defuse the Iranian nuclear issue.
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If there's a country that can handle Iran, It's no doubt China.The relations between the two current governments are good. They hadn't had any military conflict and can look back to two thousand years of trade and diplomatic relations. Both the Iranians and Chinese cherish their historic relationship and stand by each other in the international arena. China is reluctant to support the sanctions towards Iran, not because of its dependence on its oil, but it sees a no-win situation if the conflict between Iran and the West escalates.
Kudos to China - talking is better than war. China is their largest customer and a wise businessman will respond to a reasonable request from it's largest customer.