The Yinhe has been kept under surveillance by the US navy since it entered the Indian Ocean last month. Ships from the US navy have not allowed it to go beyond the Straits of Hormuz at the entrance to the Gulf. Last week the United Arab Emirates, under pressure from Washington, refused the ship permission to dock at Dubai to unload its cargo.
China insists that the cargo destined for Iran consists only of paper goods, hardware and machine parts. Peking has accused Washington of acting like a 'self-appointed international policeman'.
The US has said that the ship is carrying two chemicals which can be used to make mustard gas: thiodiglycol and thionyl chloride. Dealing in these chemicals will be prohibited once the Chemical Weapons Convention (CWC) initiated on 13 January takes effect in two years. China has signed the convention but not ratified it.
The absence of mandatory provisions has not deterred the US from acting to thwart the traffic. Warren Christopher, the US Secretary of State, has insisted that the US reserves the right to inspect the cargo of any ship suspected of violating international agreements suppressing the proliferation of chemical weapons. 'We'll find a way to make sure those chemicals are not delivered into the wrong hands,' he said.
The Clinton administration is trying to strike a compromise, discussing with the Chinese the possibility of having a neutral third party board the ship.
The episode highlights the political and practical difficulties the US has in seeking to prevent the proliferation of non-conventional weapons - nuclear, biological and chemical. The move has strained Sino-American relations at a time when Bill Clinton is being urged to demand that China curb arms sales in exchange for US trade privileges.
The US has been leading a campaign to ensure that countries such as Iran and Iraq do not acquire non-conventional weapons. The evidence that emerged after the United Nations began its weapons inspections in Iraq after the end of the Gulf war demonstrated how easy it was to circumvent existing international controls.
There is considerable concern in Israel and the US that Iran is seeking nuclear weapons technology from the cash-strapped states of the former Soviet Union.
A rather more complex and delicate issue concerning non- proliferation brings in not only the US and Iran, but also North Korea and Israel. The US fears that Israeli advances to North Korea might break the international isolation imposed on Pyongyang because of its attempts to develop nuclear arms.
North Korea has been a major supplier of weapons to Arab states and Iran. Israel's growing contacts with North Korea stem from a desire to stop North Korea's supply of long-range missiles to Iran and to Syria.
Israeli officials have expressed fears that a sophisticated Scud missile with a 600-mile range recently test-fired by North Korea will be bought by Iran or Syria. The missile, code-named Rodong-1, could also carry a non- conventional warhead. The Israeli Prime Minister, Yitzhak Rabin, said that the latest delivery of North Korean missiles to Syria was on 8 August.
During a visit to Washington, Israel's Deputy Foreign Minister, Yossi Beilin, was warned of US concern by the White House deputy national security adviser, Sandy Berger.
Mr Beilin remained defiant: 'When things pertain to Israel's security, we do not seek permission or approval from any party . . . We hoped that establishing economic relations with the Democratic People's Republic of Korea could help prevent the sale of North Korean missiles and missile-launching equipment to Iran.'