German Chancellor Angela Merkel said Monday that she and Chinese Premier Wen Jiabao agreed during talks that Iran should not have the capability to build nuclear weapons or proliferate weapons of mass destruction.But Merkel, speaking at a joint news conference with Wen, did not say whether the two sides discussed possible sanctions on Teheran. Germany supports sanctions and Beijing does not.China, a permanent UN Security Council member, and a bloc of European countries, including Germany, are at odds over how to get Teheran to give up its nuclear program."We talked about Iran, and both agreed Iran should not have the capability to make nuclear weapons and shouldn't proliferate weapons of mass destruction," Merkel said.China on Tuesday defended its nuclear cooperation with Iran following a British Broadcasting Corp. report that traced Teheran's newly announced ability to enrich uranium to Chinese assistance.Beijing abided by the Nuclear Nonproliferation Treaty in collaborating with Iran on "peacefully using nuclear technology" and reported their dealings to the International Atomic Energy Agency, said Foreign Ministry spokesman Liu Jianchao."Since 1992 China has been a party to the NPT and we have been honoring our commitments," Liu said at a news briefing. "We have reported our cooperation with Iran to the IAEA."The BBC report last week quoted Western diplomats as saying Iran may have used a small amount of material sold by China in 1991 for the uranium enrichment process. The diplomats said that indicated the program may not be as advanced as it appears.