WASHINGTON (Reuters) - Chinese sales of assault rifles and other small arms to its ally Sudan have grown rapidly during the Darfur conflict despite a U.N. arms embargo, a human rights group said on Thursday.

Human Rights First, a U.S.-based nonprofit group, said a detailed study of Sudanese and U.N. trade data showed that China was virtually the sole supplier of small arms to Sudan, which pays for the weapons with its growing oil revenues.

"The people of Sudan's Darfur region will endure more death, disease and dislocation, and this will be due in no small part to China's callousness," said the report, which called on Beijing to stop all arms sales to Sudan and urged the world to link that campaign to the Beijing Olympics.

China bristles at Western criticism that it has not used its influence to press for an end to the bloodshed in Darfur, which the United States has labeled as genocide. It angrily rejects efforts to link its policies to the showcase Beijing Games due to take place this summer.

China sold Sudan $55 million worth of small arms from 2003-2006 and provided 90 percent of Sudan's small arms since 2004 when a U.N. arms embargo took effect, the report said.

Chinese-made AK-47 assault rifles, grenade launchers and ammunition for rifles and heavy machine guns have all flowed into Darfur, said the report.

ACTION AND RHETORIC

Wang Baodong, spokesman for the Chinese Embassy in Washington, said "the conclusions of the report are misleading, and the allegations against the Chinese government are unwarranted."

"It's another typical example of a handful of people with political motives trying to vilify the Chinese government and the Beijing Olympic Games," he said in a written statement.

International experts estimate some 200,000 people have died and 2.5 million have been forced to flee their homes in Darfur since conflict erupted in 2003, when rebels took up arms against the central government. The government has mobilized mainly Arab militias to quell the revolt.

Sudan's refusal to obey U.N. Security Council resolutions banning arms transfers to Darfur undercut China's assertions it could not affect Sudan's behavior there, the group said.

"China can exercise absolute control over its own actions and can stop shipping arms to the Sudanese government which has publicly stated that it will ignore the U.N. arms embargo," said Betsy Apple, representing the group.

But Human Rights First was not advocating a boycott of the Beijing Olympics as some Darfur activists have called for.

"We believe that China is particularly vulnerable in the lead up to the Olympics, Apple told reporters. "We want to see China's concrete action that matches its rhetoric."

(Editing by Alan Elsner)