Medvedev's comments were the starkest criticism of Iran's nuclear program to emerge from the Kremlin under Medvedev or his predecessor Prime Minister Vladimir Putin, and signal Moscow may be losing patience after years of a soft line toward Tehran.
"It is obvious that Iran is moving closer to possessing the potential which in principle could be used for the creation of nuclear weapons," Medvedev told a biannual meeting of Russia's ambassadors in Moscow.
"Iran is not acting in the best way," Medvedev said. He called on Tehran to "show openness and cooperate" with the UN nuclear watchdog, the International Atomic Energy Agency.
The United States, major European Union powers and Israel say they suspect that Iran is trying to build atomic weapons under the cover of its civilian nuclear program. Iran denies that and says it has a right to nuclear power.
Moscow has been Tehran's main nuclear partner, building Iran's first nuclear power plant near the city of Bushehr, which is set to begin operations later this year. Russia also was swift to congratulate Iran's President Mahmoud Ahmadinejad on a disputed election victory last year.
A major goal of US President Barack Obama's "reset" of warmer relations with Moscow has been winning Russian backing for a tougher international line toward Iran.
Urged on by the Obama administration, Russia voted for a UN Security Council resolution on June 9 to impose new sanctions on Iran over its nuclear program. Medvedev said he was still skeptical of sanctions but they could prod diplomacy.
"I have said before that sanctions as a rule do not have the desired results. Their role is to send a signal, to stimulate the negotiating process," Medvedev said.
Russia has been dismayed by Iran's failure to disclose full details about its nuclear program and Medvedev has expressed increasing concern in recent months about Tehran's nuclear aims.
Kremlin officials were furious when the Iranian leader admonished Medvedev in May for bowing to what Ahmadinejad said was US pressure to agree sanctions.
The Kremlin chief, who diplomats say still defers to Putin on major policy issues such as Iran, last month said he was alarmed by US assertions that Iran had enough fuel for a nuclear weapon.
Resolution of the Iranian nuclear issue would involve a great deal of patience and energy, but the consequences of failure to deal with it would be grave, Medvedev said.
"At the moment, patience is demanded and the speediest resumption of productive dialogue with Tehran," Medvedev said. "If diplomats let this chance go then this will become a collective failure for the entire international community."
