BEIJING—Gu Kailai, the wife of ousted Communist Party official Bo Xilai, was found guilty and given a suspended death sentence on Monday for the murder of British businessman Neil Heywood in the southwestern city of Chongqing last year, according to observers in the courtroom.

They said the Intermediate People's Court in the eastern city of Hefei gave Ms. Gu a death sentence with a two-year reprieve—a penalty that had been widely expected and is normally commuted to a life sentence in prison after two years of good behavior.

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