Diplomacy was key to dealing with both countries, he said, although Iran's case was different since, unlike North Korea, there was no evidence it had yet acquired the capacity to develop nuclear arms.

Even if Iran intends to develop an atom bomb, intelligence suggests they are still four to nine years away from doing so, the head of the International Atomic Energy Agency told a seminar at Kyoto University in western Japan.

"That means we still have enough time for diplomacy. We need to reintegrate them into the international community and gradually try to change the hearts and minds in Iran through a process of reintegration," he said.

North Korea came under fresh sanctions after testing an atom bomb on October 9, while Iran also faces threats of punitive measures for refusing to freeze nuclear enrichment.

"We should not talk about changing the government in Iran. We should not talk about use of military force in Iran, because the more you talk about that the more the Iranians or the (North) Koreans will feel threatened and will continue to accelerate their nuclear weapon programme," ElBaradei warned.

The UN nuclear watchdog chief argued that sanctions alone would not resolve the Iran or North Korea situations.

"I've always said that sanctions alone will never resolve a conflict. In many cases sanctions harden the resolve of a country," he said.

"You have, in addition to sanctions, to provide incentives. You have to work with a stick and a carrot."

The United States and Japan led a drive that imposed further sanctions on the North after its nuclear test.

Washington has also called for UN sanctions against Iran in response to its sensitive nuclear work. But Russia and China have been more cautious.

ElBaradei arrived in Japan on Wednesday and met Thursday with Foreign Minister Taro Aso.

On Monday he heads to China, where two days of meetings last week involving US and North Korean envoys failed to set a date for the next round of stalled six-nation talks on halting Pyongyang's nuclear programmes.

Meanwhile, North Korea has offered Russia exclusive rights to its natural uranium deposits in exchange for Moscow's support at six-party talks aimed at denuclearising Pyongyang, a report said yesterday.

Russia had requested that North Korea give Moscow exclusive rights to import Pyongyang's natural uranium, with plans to profit by enriching and exporting it as nuclear fuel to China and Vietnam, the Tokyo Shimbun reported in a dispatch from Vladivostok in eastern Russia.

The two countries have been secretly in talks since 2002 on the deal, but Pyongyang only recently showed a positive attitude on the deal, demanding Russian support its position in the stalled six-party talks as a precondition for the deal, the newspaper said, citing unnamed Russian government sources.

The multi-lateral talks, which started in 2003, broke down late last year when North Korea walked out over separate financial sanctions imposed on it by the United States for money laundering and counterfeiting.

Pyongyang only agreed about a month ago to return to the talks after testing its nuclear bomb and drawing UN Security Council sanctions.

The US, along with Japan, has said it would not resume the six-party talks until a concrete outcome is ready to be put on the table, fearing North Korea would use the meeting as a stalling tactic to expand its nuclear arsenal.