Nine votes and no vetoes from the five permanent council members-Britain, France, China, Russia and the United States-are required to adopt resolutions at the Security Council.
The British-drafted resolution, which would have called out Iran's failure to block supplies of missiles to the Yemeni rebels, was supported by most members on the 15-member U.N. Security Council in an 11-2 vote, but was ultimately blocked by Russia's veto.
The #Yemen panel of expert also had very harsh words for Saudi Arabia, UAE & coalition for using siege & starvation as a weapon of war.
Nebenzia concluded that a consolidated approach is necessary from all global and regional governments, including Iran and Saudi Arabia, to deal with the fundamental issues in Yemen.
China and Kazakhstan abstained, while Bolivia also voted against the measure.
For its part, Russian Federation insisted it could not consent to a draft resolution that it said "will inevitably escalate regional tensions".
Iran has always denied arming the Houthis and has instead accused the United States of faking evidence or has pointed the finger at other nations.
But Russian UN Ambassador Vasily Nebenzya said the resolution was based on "selective and contentious conclusions" about Iran's involvement in the civil war between Yemen's Huthi rebels and the Saudi-backed government and would have had "dangerous, destabilizing ramifications" for the region.
The report by a United Nations panel of experts concluded that Iran was in violation of the 2015 arms embargo after determining that missiles fired by the Houthis at Saudi Arabia a year ago were made in Iran. "This is perverse when, in fact, Russia's veto today serves only to protect Iran's efforts to destabilize the region and spread its malign influence".
The Security Council on Monday adopted a Russian-drafted resolution on a technical rollover of the Yemen sanctions regime.
US Ambassador Nikki Haley released a statement accusing Russian Federation of shielding Iran and warned the United States would consider other ways to take action against Tehran.
Iran's U.N. Mission reiterated Monday that it "categorically rejects allegations regarding arms transfer to Yemen".
Since March 2015, Saudi Arabia and some of its Arab allies have been carrying out deadly airstrikes against the Houthi Ansarullah movement in an attempt to restore power to fugitive former president Abd Rabbuh Mansour Hadi.
Iran has repeatedly denied arming Yemen revolutionaries, stressing that such accusations have been baseless, and lashing out at the global community for Turing a blind eye on the U.S. and Britain for selling Saudi Arabia arms that could be used to commit war crimes in the Arab impoverished country.
The UN estimates that 17 million people in Yemen - 60 percent of the population - are in need of food aid, of whom 7 million are on the brink of starvation because of the conflict. In his words, Iran has to take responsibility for its actions.