Ban said he was "deeply concerned" by a report from the U.N. nuclear watchdog, the International Atomic Energy Agency, indicating Iran could be attempting to develop nuclear weapons.
The United States and Israel have suggested military strikes on Iranian nuclear facilities could be a last resort if diplomatic means fail to keep Iran from working to develop nuclear weapons, but Ban appeared to reject the suggestions.
Asked at a Vienna news conference it there should be a "next step" or a "Plan B" if sanctions fail, Ban said: "All these issues should be resolved peacefully, through negotiation, through dialogue. I do not know what you meant by 'Plan B' but there is not an alternative to a peaceful resolution of this issue."
His comments came after ceremonies marking the 15th anniversary of the Comprehensive Test Ban Treaty Organization, a U.N. agency established to verify countries do not violate a ban on testing nuclear weapons.
Ban said he has told President Mahmoud Ahmadinejad and other senior officials in the Iranian government "the onus is on the Iranian side to prove, to convince the international community that their nuclear development program is genuinely for peaceful purposes only."
"To my mind and to the IAEA, they have not been able to convince the international community, so they have to fully cooperate with the IAEA and with the United Nations and the Security Council. That is their responsibility."
Iran said Wednesday it has put its first domestically made nuclear fuel rods into a nuclear reactor.
The Islamic Republic has said its nuclear program is for peaceful purposes, but Western countries have tightened sanctions amid concerns the country is working to develop nuclear weapons.