(Recasts with Security Council meeting)

By Evelyn Leopold and Paul Taylor

UNITED NATIONS, Sept 26 (Reuters) - The U.N. Security Council on Wednesday urged Myanmar to admit a top U.N. envoy immediately, but China immediately ruled out calls for sanctions or a U.N. condemnation of the ruling junta's use of force.

The United States and the 27-member European Union had asked the council to consider punitive measures and demanded that the junta in the former Burma open a dialogue with jailed opposition leader Aung San Suu Kyi and ethnic minorities.

"We believe that sanctions (are) not helpful for the situation down there," China's U.N. Ambassador Wang Guangya told reporters.

While expressing concern at events, Wang said the situation in Myanmar did not "constitute a threat to international peace and security," the main mandate of the Security Council and the reason China in the past has prevented council action.

Council members, after an emergency session, "expressed their concern vis-a-vis the situation, and have urged restraint, especially from the government of Myanmar," said French Ambassador Jean-Maurice Ripert, the current council president.

"They welcomed the decision by the secretary-general to urgently dispatch his special envoy to the region and underline the importance that Mr. (Ibrahim) Gambari be received by the authorities of Myanmar as soon as possible," Ripert said.

U.N. Secretary-General Ban Ki-moon said Gambari, a U.N. undersecretary-general, would leave for the region immediately while he waited for Myanmar to admit him.

A report by Gambari, particularly a negative one, would keep the issue before the council. China and Russia, which have friendly relations with the Myanmar authorities, in January vetoed a U.S.-drafted resolution calling on the junta to stop persecution of minority and opposition groups.

Backing the mission, U.S. Ambassador Zalmay Khalilzad told reporters, "It would not be good for Mr. Gambari to visit grave sites after many more Burmese have been killed."

WARNING SHOTS, THREE DEAD

Hospital sources in Myanmar said at least three people, including two monks, were shot dead as security forces fired warning shots and used tear gas and baton charges to try to quell the biggest anti-junta protests in two decades.

Gambari, according to British Ambassador John Sawers, spoke to council members of "a fork in the road for the Burmese authorities -- whether they go backwards to the period of violence and oppression or whether they can find a way forward to negotiate a new future for that country."

Earlier, the United States and the European Union, in a statement said, "We condemn all violence against peaceful demonstrators and remind the country's leaders of their personal responsibilities (for) their actions."

"We call on the Security Council to discuss this situation urgently and to consider further steps including sanctions," they said in a statement after the 27 EU foreign ministers met U.S. Secretary of State Condoleezza Rice on the sidelines of the U.N. General Assembly.

Foreign ministers of the Group of Eight industrial nations, meeting separately, agreed on a similar formula but without a call for sanctions, in deference to Russia. Participants said Rice and Russian Foreign Minister Sergei Lavrov clashed over the sanctions issue.

The EU-U.S. statement called on China, India and members of the Association of South East Asian Nations (ASEAN) to use their influence to press the Myanmar government to open a dialogue with opponents.

In the first critical comment by an Asian leader, Thai Prime Minister Surayud Chulanont urged the military rulers in Myanmar to avoid violence.

"I'm trying my best to convince the Burmese: 'Don't use the harsh measures'," he told the Asia Society in New York.

The European Union and the United States already have targeted asset freezes and visa bans on key members of the Myanmar leadership.

EU External Relations Commissioner Benita Ferrero-Waldner said those measures could be expanded to more officials involved in repression. Other sanctions could include "some ban on logging, for instance, because there it seems a lot of money is being made," she said.

The London-based environmental group Global Witness estimates that 1.5 million tons of timber worth $350 million were shipped illegally from Myanmar into China in 2005.

The crisis has been a major theme of the General Assembly's annual gathering of world leaders, which opened on Tuesday. President George W. Bush, in his speech to the assembly, announced new sanctions against the junta.

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