Japan, backed by the United States and Britain, drafted a resolution demanding that nations withhold all funds, goods and technology that could be used for North Korea's missile program, Reuters reported.
Russia, however, said it opposed sanctions and would prefer a statement instead of a resolution.
China, which has been one of North Korea's closest allies, urged caution from all sides.
"This is the view of the international community, that actions taken should be constructive for maintaining peace in that part of the world," Chinese Ambassador to the U.N. Wang Guangya told reporters. "If all council members feel that some appropriate action is needed by the council, we will see. ... But certainly what happened was a regret."
Despite international warnings, North Korea on Tuesday and Wednesday launched at least seven missiles, officials in Japan and South Korea said.
A long-range Taepodong-2 missile, designed to reach U.S. soil, failed 40 seconds into its flight, according to U.S. officials.
"The United States strongly condemns these missile launches and North Korea's unwillingness to heed calls for restraint from the international community," White House spokesman Tony Snow said in a statement.
The United States believes six-party talks with North Korea, also involving China, Japan, South Korea and Russia, remains the best way to resolve the nuclear impasse, said Secretary of State Condoleezza Rice.
"The international community does have at its disposal a number of tools to make it more difficult for the North Koreans to engage in this kind of brinkmanship," she said, according to the Associated Press.
Assistant Secretary of State Christopher Hill said he planned to leave Wednesday evening for Beijing, China for talks with officials involved in the negotiations.
He said the Security Council may issue some sort of resolution, but he declined to give further details, reported the AP.
In Afghanistan Plan, Exit Strategy Remains a Sticking Point