I've heard it many times. I searched the web and dictionary and found two meanings.

An official engaged in international negotiations (this is clear to me).
A person who deals tactfully with others (unclear).

We often say Ah! Come on...stop being diplomat. Does it mean that we want the other person to be clear and straightforward (but then it's a bit negative) without playing with words? Does this word, by any means, refer to cunningness?