* Russia says most victims were killed by knives, shot
* UK disagrees with Russia, says most killed by government (Adds British envoy, statement by Ban and Annan, background)
By Louis Charbonneau
UNITED NATIONS, May 27 (Reuters) - The U.N. Security Council met on Sunday to discuss the recent massacre in the Syrian town of Houla, which the United Nations and Western powers blamed on the Syrian government but Damascus an d Moscow suggested was due to a rebel attack.
At least 116 people, including many children, were killed in the Houla attack, the head of the U.N. observer mission in Syria General Robert Mood told the 15-nation council, according to a diplomat who was in the closed-door meeting. The diplomat spoke to Reuters on condition of anonymity.
Russian Deputy U.N. Ambassador Alexander Pankin told reporters Moscow was skeptical about suggestions that the Syrian government was behind the massacre, saying it appeared most of the victims were killed with knives or shot at point-blank range.
British Ambassador Mark Lyall Grant disagreed.
"It seems quite clear that the massacre in Houla was caused by heavy bombardment, by government artillery and tanks," Lyall Grant said ahead of the meeting.
Security Council diplomats said they hoped to agree on some kind of condemnation of the massacre, though Russia was clearly at odds with the Western powers regarding who was to blame.
Lyall Grant was asked if he thought the Houla massacre could finally bring Russia and China around to support sanctions against Damascus, something Moscow and Beijing have so far rejected. He referred to Russia's doubts about the Syrian government's responsibility for the onslaught on Houla.
"It doesn't sound promising," Lyall Grant said.
Russia has accused the United States and Europe of pursuing Libya-style regime change in Syria, where President Bashar al-Assad has been trying to crush a 14-month-old insurgency that began peacefully but has become increasingly militarized.
Syria is home to Russia's only warm-water port outside the former Soviet Union and is a major purchaser of Russian weapons.
The emergency council meeting was called after Russia rejected a French and British proposal for a statement condemning the massacre, diplomats said on condition of anonymity.
Moscow, which remains a staunch ally of Syrian President Bashar al-Assad, told other members of the 15-nation council that it wanted a briefing from Mood before agreeing to a statement, envoys said.
Mood spoke to the Security Council via a video link from Damascus.
In contrast to the Russian envoy's suggestions that the rebels were to blame for Houla, U.N. Secretary-General Ban Ki-moon and international mediator Kofi Annan, Ban's predecessor, issued a joint statement on Saturday in which they made clear they held the government responsible for the massacre.
"This appalling and brutal crime involving indiscriminate and disproportionate use of force is a flagrant violation of international law and of the commitments of the Syrian Government to cease the use of heavy weapons in population centers and violence in all its forms," Ban and Annan said.
Annan brokered a peace plan earlier this year that called for a truce, deployment of U.N. observers to monitor the ceasefire, humanitarian access and dialogue between the opposition and government aimed at a "political transition."
But a truce declared for April 12 never took hold and Ban reported last week that there has been little progress on the other aspects of Annan's six-point plan. Annan is scheduled to brief the council on Wednesday about his mediation efforts. (Reporting by Louis Charbonneau; Editing by Philip Barbara and Jackie Frank)