Queen marks official birthday at Trooping of the Colour

The Queen marked her 84th official birthday today with a review of hundreds of soldiers in the annual Trooping of the Colour.

She wore a light lilac outfit as she inspected rows of crimson-coated Guardsmen while the sun shone weakly over Horse Guards Parade.

The parade included more than 1,400 soldiers in the traditional uniforms of the Household Cavalry, Royal Horse Artillery and Foot Guards.

The colour being trooped today was presented by the Queen to the 1st Battalion Grenadier Guards last month, just two weeks after the unit returned from Afghanistan.

The Queen took the royal salute as she has done every year since 1952, with the exception of 1955 when the ceremony was cancelled due to a national rail strike.

She was accompanied on the short journey from Buckingham Palace by Prince Phillip, who underwent minor surgery on his left hand earlier this week.

They rode down Pall Mall to the parade ground behind Downing Street in an open-topped carriage first used by Queen Victoria in 1842

Prince Charles also attended the ceremony despite suffering from a persistent chest infection and is scheduled to take three days off next week.

He was accompanied the Duchess of Cornwall, who suffered a broken leg earlier this year and had the cast removed just two weeks ago, and Prince William, currently training to be an RAF search and rescue helicopter pilot.

Princess Ann, who is Colonel of the Blues and Royals and tenth in line to the throne, rode her charger Elizabeth in the parade that followed the Queen’s carriage.

After taking the salute the Queen and other royals returned to the Palace where they watched an RAF flypast by 13 different types of aircraft, including World War II Spitfire, Hurricane and Lancaster, modern Typhoon fighters and the Red Arrows aerobatic display team.

The Battle of Britain Memorial Flight led the formation to commemorate the 70th anniversary of Britain’s defeat of Germany.

Since her coronation in 1952, the Queen has only ever missed the Trooping of the Colour once in 1955 when it was cancelled due to a national rail strike.

The ceremony, which marks the official birthday of British monarchs, was created so sovereigns whose birthdays fell in the winter months were able to enjoy a day of pageantry during fine summer weather. It always falls on a Saturday in June.

The Queen celebrated her actual birthday on April 21. She was 84.

Actress Catherine Zeta-Jones, former England goalkeeper Bert Williams and cricket statisticians Frank Duckworth and Tony Lewis were all on the Queen’s Birthday Honours list, released earlier today.

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Oil spill: BP 'may suspend dividend payout'

Board of energy giant to discuss withholding dividend as efforts to cap ruptured well put strain on US-British relations

Thick oil from the BP Deepwater Horizon oil spill floats on the surface of the water near Port Sulphur in Louisiana. Photograph: Saul Loeb/AFP/Getty Images

BP could suspend its dividend payout to shareholders over the Gulf of Mexico oil spill, the energy giant has confirmed.

The company said its board would meet on Monday to consider withholding the latest tranche of a £7bn annual payout.

The move comes as David Cameron and Barack Obama prepare to discuss the crisis this afternoon.

A BP spokesman admitted there had been "a lot of political pressure" on the company, and said that suspending the dividend was "an option that's up for discussion".

"No decision has been made on it, we are looking at options," he said.

"There's a board meeting on Monday, but they are not necessarily going to take a decision on it then."

Scientists have said that the amount of oil gushing out of the ruptured well, which bores a mile deep into the seabed, is far higher than previously estimated.

Up to 40,000 barrels a day, over a period of weeks, could have escaped before containment efforts were implemented, the US Geological Survey calculated.

The US president was due to phone Cameron at 4pm (UK time), before taking his fourth trip to the Gulf coast to assess the response to the spill and meet affected residents on Monday and Tuesday, the White House said.

There have been claims that Obama's hard line on BP is jeopardising both its share price and British pensions.

Cameron has been under pressure from senior figures, such as the London mayor, Boris Johnson, to defend BP and stand up to his US counterpart.

Cameron yesterday told the BP chairman, Carl-Henric Svanberg, that it was "in everyone's interests that BP continues to be a financially strong and stable company".

But the prime minister acknowledged Obama's anger, adding that he too was "frustrated and concerned about the environmental damage caused by the leak".

Svanberg has been summoned to the White House for talks with Obama on Wednesday.

The deputy prime minister, Nick Clegg, said yesterday that he would not allow the row to become a "tit-for-tat political diplomatic spat".

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Families plan to sue Bloody Sunday paras

Families of those shot dead on Bloody Sunday are expected to mount a private prosecution if the Saville report provides evidence of unlawful killing.

On Tuesday Lord Saville of Newdigate will present his long-awaited report into the killing of 13 unarmed civilians by British soldiers during a civil rights march in Londonderry in 1972. Up to 10,000 people are expected to watch a live presentation of the results of the 12-year inquiry, the longest in legal history, on giant screens in Guildhall Square, Londonderry.

Reports that Lord Saville will brand some of the killings unlawful were yesterday dismissed as “unhelpful speculation” by the Government.

However, the idea of former paratroopers ending up in the dock for their role in events so long ago is already causing consternation in military and Unionist circles.

The decision on bringing charges lies with the Public Prosecution Service in Northern Ireland, which has to consider two criteria: the sufficiency of the evidence, and whether a trial would be in the public interest.If a prosecution was not brought, it is understood that some of the families would consider mounting a private prosecution themselves.

Jonathan Powell, who as Tony Blair’s chief of staff played a pivotal role in the peace process, admitted that the inquiry may have been a costly mistake, and questioned whether the £190 million exercise would “bring closure” to the dispute.

“Our experience of inquiries is that they tend not to settle disputes — be they in Northern Ireland or Iraq — just reopen the damn things,” he told The Times.

Lord Trimble, the former Ulster Unionist Party leader and Nobel peace laureate, said he feared that the report would “inevitably raise tensions” in Northern Ireland.

He warned that if the conclusions went beyond those of the Widgery report in 1972 — which said that the troops’ behaviour had merely “bordered on the reckless” — there would be immediate pressure to prosecute former soldiers for manslaughter or murder. Asked how Unionists would react, he replied: “Use your imagination.”

A senior British officer warned that the report “could become an issue if the Government or Ministry of Defence were seen to be dumping on those involved in some way, especially for the Parachute Regiment”. He added: “We are alert to this and determined not to allow it to materialise. We must ensure they are looked after.”

Ian Paisley Jnr, the Democratic Unionist MP for North Antrim, said that prosecuting soldiers “would be completely outrageous and turn the justice process on its head purely to facilitate the ideological needs of Republicans. We would reject it completely”.

He claimed that the inquiry was designed to rewrite history to make the IRA look good and the British bad. It had focused, he said, on just 13 victims of the Troubles when many of the 3,000 killings in the Troubles — many by the IRA — remained unresolved.

Soldiers who testified before Lord Saville’s tribunal were granted immunity only from self-incrimination.

Mr Blair clearly did not anticipate prosecutions when he announced the inquiry earlier that year. He had told the Commons that the aim was “not to accuse individuals or institutions, or to invite fresh recriminations, but to establish the truth”. That was the way to the “necessary reconciliation that will be such an important part of building a secure future for the people of Northern Ireland”.

There were calls for restraint from all sides ahead of Tuesday, with some MPs attributing the timing of Lord Trimble’s remarks to his current role as a Conservative peer rather than as a player in the peace process. “There may be an effort to raise false expectations over the strength of Saville’s conclusions — or even some game-playing to make David Cameron look statesmanlike on Tuesday,” said one. “Whatever the case, I don’t think pre-emptive briefing is helpful.”

Martin McGuinness, the Sinn Féin MP who was an IRA commander in Londonderry at the time of the shootings, said that speculative reports were “heaping anguish upon anguish” on the families. Sinn Féin declined to say last night whether it favoured the prosecution of soldiers.

Shaun Woodward, the Shadow Northern Ireland Secretary, urged “everyone to show self-discipline before the Saville report is published”.

He said that the decision to hold the inquiry was crucial to reaching agreement, adding: “No one should confuse the cost of the Saville report over the last 12 years with its real value. It established the British Government’s bona fides for the peace process by showing we were willing to put ourselves directly into the witness box.”

Mr Powell said that the Government had been under intense pressure from Republicans and from the Government of the Irish Republic to set up the inquiry, but hearing demands from Sinn Féin afterwards for soldiers to be punished had soon left him “doubting the wisdom of what we had done”.

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Bank nerves jangle as the public fears 3.3% inflation

The UK public’s median expectation is that benchmark annual inflation will be 3.3% over the coming year, the highest such forecast for nearly two years.

The Bank of England’s Monetary Policy Committee has hammered home the importance of keeping the public’s expectations of future inflation low as it attempts to look through a “temporary” spike in prices and hold UK base rates at a record low of 0.5% to support the economy.

The bank’s latest quarterly inflation attitudes survey, published yesterday may jangle the nerves of some members of the nine-strong MPC.

In the Bank of England’s previous quarterly survey, people had forecast benchmark annual consumer prices index inflation would be about 2.5% over the coming 12 months.

Economists voiced their belief that the MPC would still not be in any hurry to raise base rates given the impending UK fiscal consolidation, which is viewed as a threat to the emerging economic recovery.

And high inflation expectations look extremely unlikely to feed through to significant pay rises given ongoing wage freezes in some parts of the private sector and future slashing of public spending.

Annual UK CPI inflation has surged from 1.1% last September to 3.7% in April, nearly double the 2% target.More positively from an inflation perspective, official data yesterday showed UK factory gate prices rose by a smaller-than-expected 0.3% in May.

Producers’ input prices, covering materials and fuel, fell by 0.6% month-on-month in May. Although this was slightly less steep than the 0.8% drop forecast by the City, it was the first monthly fall in input prices since last September.

Vicky Redwood, senior UK economist at consultancy Capital Economics, said of the inflation outlook: “The good news was May’s relatively benign producer prices figures … Provided that oil prices do not start to rise again, there is now a good chance that cost pressures early on in the pipeline have now peaked.”

She added: “Less reassuring was the pick-up in households’ inflation expectations revealed by the Bank of England’s … survey.”

Redwood noted the YouGov and Citigroup measure of inflation expectations had also risen sharply.

However, while seeing potential for higher inflation to persist in coming months, she believed the MPC would continue to focus on the medium-term picture when setting

interest rates.

Redwood said: “We have pointed out before that inflation tends to influence inflation expectations

rather than the other way around. All measures of expectations rose as inflation picked up in 2008. But this did not stop inflation from falling back sharply – with expectations falling back quickly too.”

Noting speculation that Chancellor George Osborne might hike the rate of value-added tax from 17.5% in his June 22 Budget, she added: “Admittedly, the current rise in inflation threatens to last longer than that in 2008, particularly if VAT is increased in the upcoming emergency Budget.

“Against that, though, the generally weaker economic environment and greater degree of slack in the labour market suggests that any rise in inflation expectations is even less likely to prompt a pick-up in actual inflation or wages. Accordingly, we doubt that the MPC will fret too much.”

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Melton college students on South Africa fatal crash bus

Nicolene Smalman from the Lowvelder newspaper gives more details about the accident

Two British women died when a bus carrying students from a Leicestershire college overturned in South Africa.

Brooksby Melton College, an agricultural college in Asfordby Road, Melton Mowbray, confirmed its students were on the bus.

The vehicle is reported to have swerved and overturned near Nelspruit.

The Foreign Office confirmed two students died in the incident and said relatives had been contacted.

A number of passengers have also been hurt and one man is reported to be critically injured.

The bus was carrying 18 students from the college, said Chameleon Worldwide, the Hampshire firm which organised the trip.

Two teachers, a Zimbabwean driver and a South African guide were also on board.

Due home

The students were believed to be studying animal management and welfare.

A spokeswoman for the firm said: "We can confirm that no other colleges were on this trip and only students from Leicestershire were involved."

Managing director Mark Wright said it was a "tragic event".

Local reporters said some of the injured were trapped under the vehicle

It is understood the group was not in South Africa for the World Cup and they were due to return home on Friday.

In a statement, the college said: "We can confirm our students are involved in an incident on an organised trip.

"We are working under guidance of the trip organiser's crisis management services, and are in touch with the organisers."

Nicola Brewer, the British High Commissioner to South Africa, said: "It is with great sadness that I can confirm that two British Nationals have been killed in a coach crash in Baberton, near Nelspruit.

"They were part of a group of 18 students and two of their lecturers on a field trip.

"The latest information I have is that a small number have been injured. They are being treated in the Nelspruit area.

"Our thoughts and sympathies are with the families and loved ones of those involved.

"I am leading a crisis team that is now on its way to Nelspruit. Our first priority is to visit the injured in hospital and get in touch with their families back home."

David Parsons, Leader of Leicestershire County Council, said: "This is clearly an appalling tragedy and our thoughts are with relatives and families of those two young people who have lost their lives.

"We are contacting the college to offer any help and support we can."

The emergency number for next of kin to call is 01962 737634.

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BP accused of 'lack of integrity' by US House speaker

BP is working to contain the spill having failed to plug the leak

US House Speaker Nancy Pelosi has accused BP of a "lack of integrity" when making its case for deepwater drilling in the Gulf of Mexico.

US President Barack Obama is due to meet relatives of the 11 workers killed in the explosion on the BP oil platform in the Gulf of Mexico.

BP shares in the UK have fallen to their lowest level since 1997 amid fears of huge US penalties.

The US attorney general said America would "not pay a dime" for cleaning up.

BP would be held responsible for all damages, Eric Holder said.

In another development, the Obama administration said BP had agreed to quickly meet the compensation claims of businesses and individuals whose livelihoods had been disrupted by the spill.

Mr Obama has himself come under mounting political pressure over his handling of the crisis.

Oil has been leaking into the Gulf since the Deepwater Horizon rig exploded on 20 April and sank off the coast of the US state of Louisiana, killing the 11 workers.

'Not a dime'

"It is clear that there was a lack of integrity on the part of BP when it came to what it told us about the adequacy of their technology, the sufficiency of blow-out prevention and the capacity to clean up," Speaker Pelosi said.

MARDELL'S AMERICA

Continue reading the main story

Mark Mardell,
BBC News, Washington

The fact that Mr Hayward is not American has probably made him all the more irritating to his US audience

Mark MardellBBC North America editorRead Mark's thoughts in full

Addressing reporters at the White House, she agreed with calls for BP to suspend its dividend to ensure that compensation is paid to Gulf oil spill victims.

Mr Obama said he and congressional leaders had agreed that they should look at how to update US law to ensure victims of the Gulf oil spill were protected.

Pollution legislation was written before the industry had developed ultra-deep water exploration and ought be brought up to date to ensure the people of the Gulf "are made whole", he added.

President Obama will express his "heartfelt condolences" to their families during the private meeting at the White House, his spokesman Robert Gibbs said.

"And I think he's eager to discuss with them what their family was telling them about safety conditions and what type of changes can and must be made in the regulatory framework to ensure that deepwater drilling that goes forward is done in a way that is safe and not life-threatening," Mr Gibbs added.

Amid growing public anger in the US, Mr Obama is keen to show he is on top of the situation and will make his fourth visit to the region on Monday.

His administration has been steadily applying more pressure on BP, and the US justice department is considering legal action to make sure BP has enough funds to cover the damage and compensate those affected by the slick.

"I can make this pledge to the American people - that the American people will not pay a dime for the clean-up of the Gulf region and that BP will be held responsible for all the damages that have occurred," Mr Holder told reporters in Washington.

"We will take the necessary steps to make sure that that occurs."

Tracy Wareing, an official at the US National Incident Command office, said an understanding on expediting the payment of claims had been reached at a meeting with BP executives including CEO Tony Hayward.

Administration officials had raised a "pressing concern" about the time BP was taking to provide relief payments, particularly to businesses in the stricken area, she added.

Shares fall

BP says a containment cap system placed on the blown-out well last week collected 15,800 barrels of oil on Wednesday - slightly up on the 15,010 barrels collected in the previous 24-hour period.

The company has come under increasingly sharp attack by some US politicians for its handling of the spill, described as the worst environmental disaster the US has faced.

Shares in the British oil giant have nearly halved over the last couple of months.

The UK government on Thursday sought to play down fears expressed by some senior figures of "anti-British rhetoric" in the US.

Prime Minister David Cameron, who will discuss BP with President Obama this week, said he understood the US government's "frustration".

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British PM Rules Out More Troops for Afghanistan

Photo: AP

Afghan President Hamid Karzai shakes hands with British Prime Minister David Cameron prior to a meeting at the presidential palace in Kabul, 10 Jun 2010

On his first trip to Afghanistan as prime minister, David Cameron met Thursday with President Hamid Karzai. The new British leader stressed that Afghanistan is his country's top foreign affairs issue. Cameron also said more money would be made available to counter the threat of roadside bombs to British troops.

Standing next to President Karzai, Prime Minister Cameron cited what he called the long, important relationship between the two countries and the importance his new coalition government places on the British mission in Afghanistan.

"For me, the issue of Afghanistan is the most important foreign policy issue, the most important national security issue for my country, and it is that national security approach that I want to stress here today. It is my number one priority. That is why I was so pleased to welcome President Karzai as my first visitor to Chequers as he said. It is why I formed a national security council immediately on talking office and it is why I have made this visit to Afghanistan very early on since becoming prime minister."

Speaking at a joint news conference with President Karzai in Kabul, Mr. Cameron repeated a line often delivered by the former Labor government; namely, that the aim is to get the Afghans to get to a point where they can take control of their own security and own destiny.

But time itself has become an important factor in the equation of public opinion. The NATO mission in Afghanistan has now lasted longer than the Vietnam war. Polls repeatedly show that the British public is growing increasingly weary of the conflict. The British economy is in rough shape and a planned defense review by Cameron's government is expected to slash expenditures.

Under this backdrop, the British leader said that the next 12 months in particular must prove to be successful.

"I have described this year, and the president I know agrees, in terms of the NATO mission in Afghanistan as the vital year. This is the year when we have to make progress, progress for the sake of the Afghan people, but progress also on behalf of people back at home who want this to work and want to see real progress this year."

That, Prime Minister Cameron said, includes not only the military aspects of the Afghan mission, but also progress in the political sphere in areas like reconciliation and reintegration.

Specifically on the military front, he promised more financial support directly where it is needed most.

"My biggest duty as prime minister of the United Kingdom is to our armed forces and to make sure they have all of the equipment and all of the protection that they need to do the absolutely vital job that they are doing here in Afghanistan. And I am pleased to announce today that we will be spending an extra 67 million pounds ($97 million) on countering the IED [improvised explosive device] threat and actually doubling the number of British teams that are there to counter the threat from those explosive devices."

Britain is the second largest contributor to NATO in Afghanistan. Just under 10,000 British troops are in the country with most deployed in the south, where violence has been the worst.

As to any move to build-up that number, Mr. Cameron flatly ruled that out saying, "The issue is not remotely on the U.K. agenda."

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US trade deficit widens to 16-month high

Trade still remains below levels seen before the global financial crisis

The US trade deficit widened to a 16-month high in April, as both imports and exports fell slightly.

According to the Commerce Department's data the total monthly deficit was $40.3bn (£27.5bn), up 0.6% from March.

Exports fell 0.7% from the previous month to $148.8bn, slightly faster than the 0.4% drop in imports to $189.1bn.

The figures also showed that the trade deficit with China widened by 14.3% to $19.3bn, which is the highest level since November last year.

Earlier, China had reported a higher-than-expected trade surplus for May, which was seen as giving ammunition to those in the US who argue the Chinese yuan is undervalued.

US Treasury Secretary Timothy Geithner, speaking on Thursday to the US Senate Committee on Finance, said global economic reforms were being impeded by China's refusal to revalue its currency.

He told the US Senate Committee on Finance that distortions caused by China's stance were "an impediment to the global rebalancing we need".

The latest US trade data showed that despite the small monthly fall in exports and imports, total trade volumes in April were much higher than the lows reached a year ago, when international trade collapsed in the wake of the financial crisis.

Exports were up 19.9% from April 2009, while imports were up 23.9%.

However, trade levels still remain well below the pre-crisis levels.

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O2 drops unlimited mobile data allowance

NEWS

O2 has abandoned its policy of allowing customers to use unlimited amounts of data on their mobile devices, in response to a rapid increase in data consumption on its network.

Until now, the operator gave customers on any of its mobile plans unlimited data usage, subject to a 'fair use' policy that said anyone with excessive use would be asked to cut down. On Thursday, the operator said it is replacing this with three monthly data bundles, beginning 24 June.

From that date, new and upgrading customers will get up to 500MB of data on tariffs of £25-£35 a month; or 750MB on £40-£45 a month; or 1GB on £60 a month. Anyone who signs up or upgrades before 24 June will have no cap on their data. Those starting a new contract on or after that date will get unlimited data until 1 October, after which the caps will kick in.

People who are still in contract will retain their unlimited data bundles for the life of the contract.

We can't build a six-lane highway every time the traffic increases.

– O2 spokeswoman

Those with capped data bundles will be able to purchase bolt-ons, at £5 for 500MB and £10 for 1GB. "O2 will ensure customers have the ability to easily monitor their use by sending them regular text messages," the operator promised in a statement.

In the statement, O2 chief executive Ronan Dunne said the shift to capped data usage was a response to customers "looking for clarity in pricing". A spokeswoman for O2 told ZDNet UK that the unlimited plan had contained "an excessive use policy that our customers told us wasn't clear".

The mobile industry is currently debating what to do about the explosion of data usage, with many calling for pricing to be tiered not just in terms of monthly usage, but also according to bandwidth. In May, Vodafone responded to the situation by starting to charge for out-of-bundle data usage, at around the same price as O2's bolt-ons. Vodafone gave similar reasoning, suggesting that the shift was needed to protect the network from "data abuse".

Asked whether O2's network was unable to cope with the rising levels of mobile data usage, the company's spokeswoman said such an analysis was "easy and oversimplified".

"We have to be able to manage demand," she said. "We can't be building a six-lane highway every time the traffic increases — which it is, doubling every four months."

"Most people will not notice the slightest difference — except possibly a better experience — because we can manage the network," she added.According to O2, the changes will affect less than three percent of its smartphone customers. It maintains that 500MB is more than two-and-a-half times the average O2 smartphone customer's monthly usage of data. "0.1 percent of our customers, or around 21,400 people, are using 29 percent of the total network data traffic," O2's spokeswoman said.

O2's move is part of the end of unlimited mobile data usage, according to telecoms analyst Dean Bubley of Disruptive Analysis. "The dropping of complete flat-rate [data pricing] is a theme across the industry," he said. "There are costs associated with providing data, [but] the tiering needs to be looked at carefully."

Regarding O2's claim that less than three percent of its smartphone users will be affected, Bubley noted that users of BlackBerrys and old Nokia smartphones are unlikely to be using much data anyway. However, users of recent handsets such as the iPhone will be harder hit, as they use a lot more in comparison, he suggested.

"There's an increasing number of devices on the network and an increase in the capabilities of those devices," Bubley said. "It's also a consequence of the fact that [operators] are building their networks out. The larger the network and the more cell sites it has, the more it will get used."

Bubley suggested, however, that O2's new data pricing appeared "more reasonable and fair" than that of US operator AT&T, which also abandoned flat-rate pricing earlier this month. According to the analyst, AT&T's two new price tiers — $15 (£10) a month for 200MB and £25 a month for 2GB — were "cleverly constructed to put most midrange users at least at fear of breaking their limit", thereby forcing them onto the higher tariff.

"It's inevitable you'll see caps where there aren't any at the moment," Bubley said. "The market over time will compete for higher caps."

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China reverses stance with Iran sanctions support

BEIJING — China's about-face in backing new nuclear sanctions against Iran was borne out of frustration with Tehran's intransigence and a desire to display global leadership alongside its rising financial and diplomatic clout, analysts said Thursday.

A key Iranian ally, China had been a vocal opponent of a fourth round of sanctions and could have used its power as one of five permanent U.N. Security Council members to veto the resolution.

Instead, Beijing spurned the opportunity to play spoiler, voting Wednesday in favor of the resolution targeting Iran's powerful Revolutionary Guard, ballistic missiles and nuclear-related investments in a bid to compel Tehran to cooperate with international inspectors.

"China hopes that this method will show Iran that China has principles and is a responsible major nation," said Yao Jide, an Iran expert at Yunnan University's School of International Relations.

However, China's Foreign Ministry said Thursday its support for fresh sanctions should not block efforts to find a diplomatic solution, and called for renewed attempts to bring Iran back to the negotiating table.

"China has repeated on many occasions that the resolution adopted by the U.N. Security Council does not mean that the door to diplomatic efforts is closed," said spokesman Qin Gang.

Beijing has said it opposes nuclear weapons for Iran but supports an Iranian civilian nuclear energy program. China traditionally opposes sanctions, but it went along with the first three sanctions resolutions against Iran.

Tehran insists its program is peaceful, while the U.S. and its allies say Iran is trying to produce nuclear weapons. They want Iran to suspend uranium enrichment and start negotiations aimed at ensuring that it uses nuclear technology only for peaceful purposes.

While details of the negotiations weren't known, Beijing appeared to have been satisfied that the sanctions would not harm its economic ties with Iran, with whom bilateral trade reached at least $36.5 billion last year. Iran meets 11 percent of China's energy needs and Chinese companies have major investments in Iranian energy extraction projects and the construction of roads, bridges and power plants.

China had sought to avoid a sanctions vote, saying earlier this year that it was wrong to even discuss such measures as long as a negotiated settlement remained possible.

Its support for sanctions came about only in recent months after intense lobbying by the United States and its allies, including Israel. Beijing was confronted with the prospect of diplomatic isolation over the issue, especially as fellow skeptic Russia began signaling it was losing patience with Tehran.

Israel may have also played a role in persuading China to back harsher sanctions against Iran, according to Israeli officials. In recent weeks, three Israeli delegations have gone to China, and all discussed the Iranian nuclear program, the officials said, speaking on condition of anonymity because the talks were secret.

Israel considers Iran a strategic threat because of its nuclear program, long-range missiles and repeated references by its leaders to the destruction of Israel. The Israeli delegations laid out their intelligence and concerns about Tehran's nuclear program to China.

The officials said the Israeli delegations did not bring up the possibility of an Israeli strike on Iran in the talks with the Chinese government, though it might have been discussed at the initiative of the Chinese.

Western analysts had warned that China's refusal to back sanctions risked denting its international reputation at a time when it is seeking a global leadership role.

Relations might have been harmed with crucial trading partners in the European Union, while Washington — for which the Middle East is a foreign policy linchpin — could have retaliated with further arms sales to Taiwan or by withdrawing support for Chinese interests in Iraqi oil contracts and Afghan copper mining.

Conflict over Iran would almost certainly pinch oil supplies and send prices soaring, inflicting pain on China's economy at a time when the government is spending billions of dollars to stimulate growth. If the U.S. and others deployed sanctions on their own, Chinese companies that deal with Iran could have found themselves barred from business in other nations.

Meanwhile, efforts to convince Tehran to ease its defiance and prove its peaceful intentions seemed to be going nowhere. Iran had sought to counter Western pressure with a lobbying campaign of its own, but its continued defiance convinced Beijing that sanctions were justified, Yao and other scholars said.

"Of course, Iran hoped China would veto the resolution, but conditions for doing so were not ripe," said Zhu Weilie, director of the Middle East Studies Institute at Shanghai's University of International Studies.

Zhu called Wednesday's result the best possible outcome for Beijing, balancing its relationship with Iran and its desire to be seen as a mature international stakeholder.

"China has achieved its diplomatic goal after having made many rounds of consultation with relevant countries," Zhu said. "As a responsible large country, China should show its stance."

It wasn't clear what effect the vote would have on relations between Tehran and Beijing. Russia, which also backed sanctions, has already been on the receiving end of Iranian ire, with President Mahmoud Ahmadinejad warning Russian leaders last month "to correct themselves, and not let the Iranian nation consider them among its enemies."

Ahmadinejad was set to tour the World Expo in Shanghai on Friday, but he was not expected to hold talks with senior Chinese leaders. He also skipped Thursday's summit in Uzbekistan of the Shanghai Cooperation Organization attended by Chinese President Hu Jintao.

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