Britain, France and the United States sharply criticized Russia on Tuesday for supplying weapons to Syria, where government forces have killed thousands of pro-democracy demonstrators over the last 10 months.

We are concerned about the supply of weapons into Syria, whether sales to the government or illegal smuggling to the regime or opposition, Britain's U.N. Ambassador Mark Lyall Grant told the Security Council during a debate on the Middle East.

Without mentioning Russia by name, Lyall Grant cited a media interview in which a Russian official said his country's arms deliveries to Damascus had no effect on the situation there.

We fundamentally disagree, he told the 15-nation council. It is glaringly obvious that transferring weapons into a volatile and violent situation is irresponsible and will only fuel the bloodshed.

Syrian President Bashar al-Assad has used troops and tanks to try to crush a popular revolt that began last March, killing over 5,000 people, according to U.N. figures.

Syria bought $700 million worth of Russian weapons, or 7 percent of Russia's $10 billion in arms deliveries abroad in jet trainers for over half a billion dollars in 2010, according to the Russian defence think-tank CAST.

An unnamed Russian military source was quoted as saying in December that the country had delivered anti-ship Yakhont missiles to Syria, and a Russian newspaper reported on Monday that it also has signed a deal to sell Syria nearly 40 fighter

French Ambassador Gerard Araud echoed Lyall Grant's words, saying that it was unacceptable that certain countries, including on this council, continue to provide the means of violence against the Syrian population.

The United States and their European allies have called for a U.N. arms embargo and other sanctions against Syria, but Russia vehemently opposes U.N. Security Council action.

U.S. URGES MORATORIUM ON ARMS SALES

Moscow is one of Assad's few remaining allies. It joined China in an October veto of a European-drafted U.N. Security Council resolution that would have condemned Damascus and threatened it with possible sanctions.

The United States said it had raised concerns about a Russian arms shipment to Syria, but Moscow has said it needs no justification for its defence trade with Syria without an internationally binding arms embargo in place.

U.S. Ambassador Susan Rice said it was time for all countries to declare a moratorium on arms sales to Damascus.

We call on supplier countries to voluntarily halt arms transfers to the regime, she said. And, we encourage all nations to join the widening effort to stop the flow of weapons to the Assad regime.

Rice, Lyall Grant, Araud and German Ambassador Peter Wittig met on Monday with a group of Arab envoys, including the ambassadors of Qatar and Security Council member Morocco, to discuss the Arab League's call for Assad to transfer power to his deputy to form a unity government and prepare for elections.

Recently the Russians circulated their own draft resolution on Syria to fellow council members, though U.S. and European envoys say it is too weak and only touches on parts of an earlier Arab League plan for Syria. They also say the Russian delegation has failed to incorporate their proposed revisions.

Western diplomats told Reuters privately that they would want a new resolution that would replace the Russian draft and endorse the Arab League plan for Syria. Several diplomats said France and Britain were working with Qatar and other Arab delegations on a new draft supporting the Arab League plan.

In terms of the Russian resolution, the time for that has now passed, a Western diplomat said. We are working with the Arabs and we expect that group to come forward.

The Arabs have said that they want a resolution that has consensus agreement, and of course we'll work for that, he added. We always work for consensus in the council, but sometimes that's not possible, as with our Syria resolution (that was vetoed by Russia and China).

(Editing by Philip Barbara and Cynthia Osterman)