* China says any action would escalate tensions
* Has been keen to show it does not take sides
SHANGHAI, Oct 4 (Reuters) - China's Foreign Ministry urged Turkey and Syria to exercise restraint amid mounting border tensions which saw Turkish artillery hit targets inside Syria after a mortar bomb fired from Syrian territory killed five Turkish civilians.
"We appeal to all relevant sides including Turkey and Syria to exercise restraint and refrain from taking any action that will escalate tensions in order to maintain peace and stability in the region," the ministry said in a statement on its website on Thursday (www.mfa.gov.cn).
In the most serious cross-border escalation of the 18-month uprising in Syria, Turkey hit back at what it called "the last straw" when a mortar hit a residential neighbourhood of the southern border town of Akcakale.
NATO said it stood by member-nation Turkey and urged Syria to put an end to "flagrant violations of international law".
The U.S.-led Western military alliance held an urgent late-night meeting in Brussels to discuss the matter and later on Wednesday in New York, Turkey asked the U.N. Security Council to take the "necessary action" to stop Syrian aggression.
In a letter to the president of the 15-nation Security Council, Turkish U.N. Ambassador Ertugrul Apakan called the firing of the mortar bomb "a flagrant violation of international law as well as a breach of international peace and security".
U.N. diplomats said Security Council members hoped it would issue a non-binding statement on Thursday that would condemn the mortar attack "in the strongest terms" and demand an end to violations of Turkey's territorial sovereignty.
Members had hoped to issue the statement on Wednesday, but Russia - a staunch ally of Syria's, which along with China has vetoed three U.N. resolutions condemning President Bashar al-Assad's government - asked for a delay, diplomats said.
China has been keen to show it does not take sides in Syria and has urged the government there to talk to the opposition and take steps to meet demands for political change. It has also said a transitional government should be formed.
Syria said it was investigating the source of the mortar bomb and urged restraint.