Russia and China agreed with the United States and its European allies Monday that Iran must fully suspend its nuclear program, but the countries stopped short of demanding referral to the U.N. Security Council, Britain's Foreign Office said.

In a concilatory statement, Iran's ambassador to Moscow praised a Russian proposal to move the Iranian uranium enrichment program to its territory — a step that could resolve the deadlock over Tehran's nuclear ambitions.

Russian President Vladimir Putin also urged caution in dealing with the Iranian nuclear issue, saying that Tehran might still agree to the Russian offer and warning "it's necessary to work carefully and avoid any sharp, erroneous moves."

Britain, France and Germany, backed by Washington, want Iran to be referred to the Security Council, which can impose sanctions.

But Russia and China, which have close commercial ties with Iran, have resisted such a move in the past and could stymie efforts against Tehran as veto-wielding members of the U.N. body.

The British Foreign Office said all five permanent members of the Security Council — the U.S., Britain, France, Russia and China — and Germany had shown "serious concern over Iranian moves to restart uranium enrichment activities."

They agreed on the need for Iran to "return to full suspension," according to the statement.

Diplomats from Britain, France and Germany also informed officials from Russia, China and the United States that they plan to call for an emergency board meeting of the International Atomic Energy Agency next month. The 35-nation IAEA board, which could refer the issue to the Security Council, will discuss what action to take against Iran.

Representatives of the six countries held a daylong meeting in London in a bid to reach consensus over what action to take after Iran removed U.N. seals from its main uranium enrichment facility last week and resumed research on nuclear fuel, including small-scale enrichment, after a 2 1/2-year freeze.

The move alarmed the West, which fears Iran intends to build an atomic bomb. Iran claims its program is peaceful, intended only to produce electricity and it has threatened to end cooperation the U.N. nuclear watchdog if it is brought before the Security Council.

The Russian proposal would ensure oversight so that uranium would be enriched only as much as is needed for use in nuclear power plants and not to the higher level required for weapons.

"As far as Russia's proposal is concerned, we consider it constructive and are carefully studying it. This is a good initiative to resolve the situation. We believe that Iran and Russia should find a way out of this jointly," Iran's ambassador to Moscow, Gholamreza Ansari, said in comments translated into Russian and shown on state Channel One television.

Putin, speaking in Moscow after a meeting with German Chancellor Angela Merkel, said Moscow's position is "very close" to that of the U.S. and the European Union. But he added that "it's necessary to work carefully and avoid any sharp, erroneous moves."

European diplomats have said in recent days there are signs that Russia, which is deeply involved in building Iranian reactors for power generation, is leaning toward referral. Putin's comments, though, seemed to suggest he was still looking for other alternatives.

China, which is highly dependent on Iranian oil, has warned that hauling Iran before the Security Council would escalate the situation.

The Foreign Ministry in Beijing took a cautious tone.

"China believes that under the current situation, all relevant sides should remain restrained and stick to solving the Iranian nuclear issue through negotiations," the ministry said in a statement.

Secretary of State Condoleezza Rice said the vote on referral "ought to be as soon as possible."

"We've got to finally demonstrate to Iran that it can't with impunity just cast aside the just demands of the international community," Rice said Sunday during a trip to Africa.

Speaking before Monday's talks in London, British Foreign Secretary Jack Straw said the "onus is on Iran" to prove its program is peaceful. He said the international community's confidence had been "sorely undermined by a history of concealment and deception" by Iran.

Straw said the dialogue with Russia and China was of "crucial importance."

British Prime Minister Tony Blair's official spokesman said the London talks signaled "growing international concern at the behavior of the Iranian government and at ... the words of the Iranian president," who has called for Israel to be "wiped off the map" and said the Nazi Holocaust a "myth."

Iranian state radio, meanwhile, reported that the government had allocated the equivalent of $215 million for the construction of what would be its second and third nuclear power plants. Iran plans to build 20 more nuclear plants, and Russia has offered to build some of them.

Straw reiterated that military action against Iran is not an option.

He also said sanctions were not inevitable even if the nuclear dispute is referred to the Security Council, saying other countries had complied with council demands without the need for sanctions.