US Secretary of State Hillary Clinton called the veto a "travesty". It came a day after activists said Syrian forces bombarded a district of Homs, killing more than 200 people in the worst night of bloodshed in the 11-month uprising.
Russia said the resolution was biased and would have meant taking sides in a civil war. Syria is Moscow's only big ally in the Middle East, home to a Russian naval base and customer for its arms. China's veto appeared to follow Russia's lead.
British Foreign Secretary William Hague said Moscow and Beijing had turned their backs on the Arab world. France's Alain Juppé said they "carried a terrible responsibility in the eyes of the world and Syrian people".
Clinton said the United States would work with other nations to try to tighten "regional and national" sanctions against Assad's government "to dry up the sources of funding and the arms shipments that are keeping the regime's war machine going."
"We will work to expose those who are still funding the regime and sending it weapons that are used against defenseless Syrians, including women and children," she said. "We will work with the friends of a democratic Syria around the world to support the opposition's peaceful political plans for change."
Coalition of the willing?
Clinton did not give further details which nations might band together or precisely what they might do. But it appeared that the United States might seek to help organise a "Friends of Syria" group - proposed by French President Nicolas Sarkozy after the veto - to advance the Arab League initiative given the inability to make headway at the U.N. due to Russia and China.
Sarkozy is receiving German Chancellor Angela Merkel in Paris today and the two are expected to speak on public television on a wide range of issues, including the escalating violence in Syria.
All 13 other members of the Security Council voted to back the resolution, which would have "fully supported" the Arab League plan for Assad to cede powers to a deputy, a withdrawal of troops from towns and a start to a transition to democracy.
The Western criticism was echoed in the Middle East, where Arab powers like Saudi Arabia and non-Arab Turkey have turned decisively against Assad in recent months.
"Unfortunately, yesterday in the UN, the Cold War logic continues," said Turkish Foreign Minister Ahmet Davutoğlu. "Russia and China did not vote based on the existing realities but more a reflexive attitude against the West."
Russia's UN envoy, Vitaly Churkin, accused the resolution's backers of "calling for regime change, pushing the opposition towards power and not stopping their provocations and feeding armed struggle".
"Some influential members of the international community, unfortunately including those sitting around this table, from the very beginning of the Syrian process have been undermining the opportunity for a political settlement," he said.
