Foreign ministry spokesman Ramin Mehmanparast told the government daily Iran that the lifting of sanctions would display "the first signs" that the West is changing its "wrong" approach towards Iran and its nuclear work.

Mehmanparast reiterated Tehran's assertion that the sanctions have no legal basis, but admitted "no one in Iran is happy about the sanctions" and that they "may cause problems."

But he insisted that "sanctions do not really have a significant effect."

Iran on May 23 is to meet representatives of the so-called P5+1 group, comprising the five permanent UN Security Council members plus Germany, in Iraq's capital for the second round of talks which were revived in April in Istanbul after a 15-month impasse.

Iranian leaders have been increasingly demanding that the sanctions targeting its trade and banking sectors as well its oil exports be lifted, while insisting that they were ineffective.

Mehmanparast reiterated that Iran would not give up its atomic work.

"If the West thinks we will give up our rights due to sanctions, they are definitely mistaken," he said.

He added that claims that the Western sanctions are disrupting the Iranian economy from within are part of a "propaganda and psychological warfare" launched by the West against the Islamic republic.

Iran denies Western allegations its nuclear programme may have a military component to develop atomic weapons. The Islamic republic is under a series of unilateral Western sanctions.

According to the Israeli military, Gantz's visit comes at the invitation of China's Chief-of-Staff General Chen Bindnge, who visited Israel last August.

Gantz will meet Chinese security and military officials to "discuss current security and strategic challenges, the regional security status in the Middle East and military cooperation," the military said in a statement.

He will also tour the Jewish museum in Shanghai.

China is one of the five permanent UN Security Council members which along with Germany comprise the so-called P5+1 group, which will be meeting with Iranian officials in the Iraqi capital on May 23.

The Baghdad meeting marks the second round of talks between Iran and world powers over Tehran's disputed nuclear programme, which were revived in April in Istanbul after a 15-month impasse.

China is one of the biggest customers for Iran's oil, and has publicly resisted joining the Western sanctions imposed on Tehran.

Top Israeli officials have repeatedly expressed scepticism that the talks would succeed in convincing Iran to abandon its nuclear programme, which Israel and much of the West believes is a bid to develop atomic weapons -- a charge denied by Tehran.

Security ties between Israel and China became strained after Washington pressured the Jewish state to cancel a deal in 2005 to upgrade Harpy Killer drones it had sold to Beijing amid concerns that advanced US defence technology contained in Israeli equipment could be used against Taiwan.

The Harpy debacle saw China demanding millions in compensation from Israel in what was second such claim in five years.

Israel had previously paid Beijing $350 million after breaking an agreement in 2000 to supply Falcon airplanes with an AWACS radar system.

A number of senior Israeli officials have visited China since then, most recently Defence Minister Ehud Barak in June 2011.

Speaking on condition of anonymity, an Israeli defence official told AFP that Washington was informed in advance of Gantz's visit.