Talks at the United Nations in New York have narrowed some differences on the sanctions, which would prevent a transfer of materials or funds for North Korea's missile or nuclear programmes. But other problems remained, diplomats said.
Jean-Marc de la Sabliere, France's UN ambassador and this month's council president, said he hoped for agreement on Friday on the basis of a modified text that Japan drafted. But he acknowledged that talks could spill into Saturday.
France is among the eight sponsors of the resolution.
In Tokyo, Shinzo Abe, the cabinet secretary in charge of coordinating government policy told Reuters in an interview that Japan would "insist on a binding resolution with sanctions."
And Junichiro Koizumi, the Japanese prime minister, during a visit to Jordan, said he wanted a vote on the resolution on Friday, a day before the Group of Eight industrial nations meet in St Petersburg, Russia.
Acknowledging that compromises would have to be made, Taro Aso, Japan's foreign minister, told a news conference that "it is common sense that both sides cannot achieve a perfect grade so both sides have to compromise so they can be satisfied."
An alternative text from Russia and China makes the sanctions voluntary in response to North Korea's barrage of missile test launchings on July 5, which also raised anxiety over Pyongyang's nuclear ambitions.
China has vowed to veto the UN
resolution condemning N Korea
UN diplomats, speaking on condition of anonymity because of the secrecy of the talks, said a key stumbling point was whether the resolution would be under Chapter 7 of the UN Charter, which would make it mandatory.
This provision can lead to military action - providing a second resolution approving force is adopted. China, backed by Russia, fears Chapter 7 could be cited as a justification for force even in the absence of a second resolution and says it is not necessary to make a resolution mandatory.
"It is important to send a strong signal from the Security Council. We believe it should be a Chapter 7 resolution and that remains our view and the view of Japan," John Bolton, the US ambassador, said at the United Nations.
A resolution needs a minimum of nine votes and no veto from any of the Security Council's permanent members - the United States, Britain, France, Russia and China.
Wang Guangya, Beijing's UN ambassador, has vowed to veto a resolution under Chapter 7 that would also say that North Korea is a threat to international peace and security.
The missile launches raised tensions in the region and beyond.
Japan and the United States now plan to deploy advanced missile interceptors as early as this summer at a US base in Japan, Japanese media reported. A defence ministry spokesman declined comment on the reports.
US envoy Hill left the region after
a week of shuttle diplomacy
Japan has come under harsh criticism from China and South Korea for its stern stance on the missile crisis.
Tokyo's ties with both countries are bedeviled by bitter memories of Japanese wartime aggression, while Sino-Japanese relations are also strained by rivalry for regional dominance.
South Korea said on Friday that it would send Lee Kyu-hyung, its vice-foreign minister, to China for two days from Saturday, while senior envoy Chun Yung-woo was to head to Washington on Sunday before travelling on to Tokyo.
Seoul's diplomatic moves came after Pyongyang stormed out of cabinet-level talks with the South on Thursday and Christopher Hill, the US envoy, left the region after a week of shuttle diplomacy.
China, the North's biggest backer, has had scant success in persuading Pyongyang to revive its moratorium on missile launches and return to six-country talks aimed at persuading it to scrap its nuclear programs.
The six-party talks stalled last November after Pyongyang objected to US financial sanctions based on accusations that it counterfeited US currency and trafficked drugs.