To get around the blockade, British U.N. Ambassador Mark Lyall Grant sent the draft treaty to Secretary-General Ban Ki-moon and asked him on behalf of Mexico, Australia and a number of others to put it to a swift vote in the General Assembly.
U.N. diplomats said the 193-nation General Assembly could put the draft treaty to a vote as early as Tuesday.
"A good, strong treaty has been blocked," said Britain's chief delegate, Joanne Adamson. "Most people in the world want regulation and those are the voices that need to be heard."
"This is success deferred," she added.
The head of the U.S. delegation, Assistant Secretary of State Thomas Countryman, told a group of reporters, "We look forward to this treaty being adopted very soon by the United Nations General Assembly." He declined to predict the result of a vote but said it would be a "substantial majority" in favor.
U.N. member states began meeting last week in a final push to end years of discussions and hammer out a binding international treaty to end the lack of regulation over cross-border conventional arms sales.
Arms control activists and human rights groups say a treaty is needed to halt the uncontrolled flow of arms and ammunition that they say fuels wars, atrocities and rights abuses.
Delegates to the treaty-drafting conference said on Wednesday they were close to a deal to approve the treaty, but cautioned that Iran and other countries might attempt to block it. Iran, Syriaand North Korea did just that, blocking the required consensus for it to pass.
Iranian President Mahmoud Ahmadinejad had told Iran's Press TV that Tehran supported the arms trade treaty. But Iranian U.N. Ambassador Mohammad Khazaee told the conference that he could not accept the treaty in its current form.
"The achievement of such a treaty has been rendered out of reach due to many legal flaws and loopholes," he said. "It is a matter of deep regret that genuine efforts of many countries for a robust, balanced and non-discriminatory treaty were ignored."
One of those flaws was its failure to ban sales of weapons to groups that commit "acts of aggression," ostensibly referring to rebel groups, he said. The current draft does not ban transfers to armed groups but says all arms transfers should be subjected to rigorous risk and human rights assessments first.
Syrian Ambassador Bashar Ja'afari echoed the Iranian concerns, saying he also objected to the fact that it does not prohibit weapons transfers to rebel groups.
"Unfortunately our national concerns were not taken into consideration," he said. "It can't be accepted by my country."
North Korea's delegate voiced similar complaints, suggesting it was a discriminatory treaty: "This (treaty) is not balanced."
Iran, which is under a U.N. arms embargo over its nuclear program, is eager to ensure its arms imports and exports are not curtailed, diplomats said. Syria is in a two-year-old civil war and hopes Russian and Iranian arms keep flowing in, they added.
North Korea is also under a U.N. arms embargo due to its nuclear weapons and missile programs.
Russia and China made clear they would not have blocked it but voiced serious reservations about the text and its failure to get consensus. A Russian delegate told the conference that Moscow would have to think hard about signing it if it were approved. India, Pakistan and others complained that the treaty favors exporters and creates disadvantages for arms importers.
If adopted by the General Assembly, the pact will need to be signed and ratified by at least 50 states to enter into force.
Several diplomats and human rights groups that have lobbied hard in favor of the treaty complained that the requirement of consensus for the pact to pass was something that the United States insisted on years ago. That rule gave every U.N. member state the ability to veto the draft treaty.
"The world has been held hostage by three states," said Anna Macdonald, an arms control expert at humanitarian agency Oxfam. "We have known all along that the consensus process was deeply flawed and today we see it is actually dysfunctional."
"Countries such as Iran, Syria and DPRK (North Korea) should not be allowed to dictate to the rest of the world how the sale of weapons should be regulated," she added.
The point of an arms trade treaty is to set standards for all cross-border transfers of conventional weapons. It would also create binding requirements for states to review all cross-border arms contracts to ensure arms will not be used in human rights abuses, terrorism or violations of humanitarian law.
The main reason the arms trade talks took place at all is that the United States - the world's biggest arms exporter - reversed U.S. policy on the issue after President Barack Obama was first elected and decided in 2009 to support an arms treaty.
Washington demanded that the conference be run on the basis of consensus because it wanted to be able to block any treaty that undermined the U.S. constitutional right to bear arms, a sensitive political issue in the United States. Countryman said the draft treaty did not undermine U.S. rights.
The National Rifle Association, a powerful U.S. pro-gun lobbying group, opposes the treaty and has vowed to fight to prevent its ratification if it reaches Washington. The NRA says the treaty would undermine domestic gun-ownership rights.
The American Bar Association, an attorneys' lobby group, has said that the treaty would not impact the right to bear arms.
(Reporting by Louis Charbonneau; Editing by Will Dunham, Lisa Shumaker and Paul Simao)