The draft resolution, presented by France, Germany, Portugal and Britain, won nine votes in favor, two against and four abstentions.[break]
Russia and China have the veto power on the 15-nation Security Council.
South Africa, India, Brazil and Lebanon, the four non-permanent members of the Security Council, abstained.
Syria has been wracked by six months of unrest which it blames on foreign conspiracy and armed thugs. A recent UN statement put the number of civilians killed during the past six months in Syria at 2,600, while Syria blames on foreign-backed armed gangs who it says have killed 700 security forces personnel.
"Today´s refused draft was based on a very different philosophy, the philosophy of confrontation," Vitaly Churkin, the Russian permanent representative to the United Nations, told the Security Council after the vote.
"We can´t agree with this unilateral, accusatory bent against Damascus," he said. "We believe it unacceptable the threat of an ultimatum of sanctions against the Syrian authorities."
"This approach is against the principle of a peaceful settlement of a crisis on the basis of a full Syrian national dialogue," he said. "Our proposals for wording on then unacceptability of foreign intervention were not taken into account and based on the well-known events in North Africa can only alarm us."
"The international community should provide constructive assistance to facilitate the achievement" of the objectives of the Syrian-led inclusive political process and "in the meantime it should fully respect the sovereignty, independence and territorial integrity of Syria," Li Baodong, the Chinese permanent representative to the United Nations, said at the open Security Council meeting after the vote.
"Whether the Security Council will take further action on the question of Syria should depend on whether it facilitates the easing of tension in Syria, whether it helps the defusing of differences through political dialogue, whether it contributes to maintaining peace and security in the Middle East," Li said.
"Most importantly, it should depend on the compliance with the UN Charter and the principle of non-interference," he said.
Bashar al-Ja´afari, the Syrian UN ambassador, told the council that the draft resolution, if adopted, is a tool to wage foreign intervention of the internal affairs of his country.
The Security Council "strongly condemns the continued grave and systematic human rights violations by the Syrian authorities," the killed draft resolution said.
The Security Council "demands the Syrian authorities immediately cease violations of human rights," "cease the use of force against civilians," and "ensure the safe and voluntary return of those who have fled the violence to their homes," the draft said.
The Security Council "expresses its determination to review Syria´s implementation of this resolution within 30 days and to consider its adoption, including measures under Article 41 of Chapter VII of the Charter of the United Nations," it added.
US, Europe outraged
The veto sparked U.S. and European outrage.
U.S. Ambassador Susan Rice said the draft was opposed by countries who "would rather sell arms to the Syrian regime." She said Washington is "outraged" by the vote, while France´s envoy, Gerard Araud vowed the veto "will not stop us."
Rice and British Ambassador Mark Lyall Grant walked out of the Council chamber as Syria´s representative launched a bitter condemnation of countries seeking action against President Bashar al-Assad.
Russia´s U.N. envoy, Vitaly Churkin said Moscow opposes sanctions, particularly because many Syrians do not support the anti-government movement. He said what he described as the Europeans´ confrontational approach is "against the peaceful settlement of the crisis."
The resolution´s four European sponsors revised the draft three times in an attempt to avoid the vetoes. The watered-down measure received nine votes in favor and four abstentions (Lebanon, South Africa, Brazil and India).
The proposal demands the immediate end to all bloodshed in Syria and calls for a new political process in an environment "free from violence, fear, intimidation and extremism." An explicit threat of sanctions was replaced with language merely discussing their possible consideration.
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