China has hosted a series of six-nation talks in a bid to persuade North Korea to abandon its nuclear ambitions, so far making extremely limited progress.

Iran's President Mahmoud Ahmadinejad (C) arrives at the Pudong Airport in Shanghai to attend the Shanghai Cooperation Organization (SCO) summit, June 14, 2006. [Reuters]

The participation of Iran at the Shanghai summit has already drawn fire from the United States, which remains wary about China and Russia's cosy relationship with Tehran.

China and Russia have significant business interests in Iran, with energy-hungry Beijing in negotiations for a slice of its oil reserves, the world's fourth largest.

"It strikes me as strange that one would want to bring into an organization that says it's against terrorism... one of the leading terrorist nations in the world -- Iran," US Defense Secretary Donald Rumsfeld said this month.

Although Washington accuses Tehran of sponsoring terrorism, Beijing and Moscow disagree.

They have fended off US efforts for UN Security Council-led sanctions against Iran on the nuclear issue, although they have recently given some ground.

Ji Kaiyun, an expert on Sino-Iran ties at Southwest University in China's Chongqing city, said Beijing had made it clear it did not want to be seen as a threat to the United States.

"China will not challenge, and China does not aim to transform, the US-led international order. Sino-American ties take precedence over Sino-Iranian ties. China will not clash with the United States over Iran," Ji said.

But others say China's willingness to talk with Tehran may be sending a signal to Washington about how to best handle the issue.

"The Americans have a bad record for having very little to show for ostracising states -- Cuba, North Korea and Iran," said Paul Harris, a US foreign policy expert at Hong Kong's Lingnan University.

"Naturally, the Chinese way is to take a different approach -- they don't care who they talk to and by letting the Iranians on board... it sends a signal to the United States that says your way is not the only way."