The Notting Hill star sparked rumours of a relationship with the Brit in February (11) after he was photographed in a bathrobe outside her Hollywood home, just months after she split from David Thewlis.
Now Ifans has opened up about their romance, admitting he dreams of having a child with the former Pushing Daisies star.
He tells The Sunday Times Magazine, "Men are never too old to have kids - they might be too old to be fathers, but I don't think I'm too old to be a father yet. I'd love to have children... Well, it would be nice, yes (to have kids with Friel)."
But Ifans reveals he has given up on the idea of raising a family in his native Wales, adding, "I don't know... Britain's a small place, you know. And life's about compromise, I've discovered - at long last. I'm not some medieval brigand going to put my wife and children in a Welsh cave...
"With this life, it's such a random business where you can be, where you live. But it does change, when you fall in love, and with someone who has a child as well. I would never call myself a stepfather (to Friel's daughter) but yeah... I love kids. I want them."
Friel has a six-year-old daughter, Gracie, with her ex-partner Thewlis.