The UN Security Council failed Tuesday to adopt a resolution on Palestinian statehood by a vote of eight to two, with five abstentions.
France, China and Russia were among the countries that supported the text setting a 12-month deadline for negotiations on a final peace deal with Israel.
Australia and the United States voted against, and five other countries abstained, including Britain.
The resolution set a 12-month deadline for Israel to reach a final peace deal with the Palestinians and called for a full Israeli withdrawal from the Palestinian territories by the end of 2017.
“This resolution sets the stage for more division, not for compromise,” said US Ambassador Samantha Power.
Security Council member Jordan had requested the vote on the measure drafted by the Palestinians, who are seeking to expand the role of the United Nations in Middle East peace efforts.
The United States had rejected the resolution, arguing that it set arbitrary deadlines and did not address Israel’s security concerns.
“This text addresses the concerns of just one side,” said Power.
US Secretary of State John Kerry had lobbied in the days leading up to the vote, calling 13 foreign ministers to explain US opposition.
Washington was not, however, compelled to resort to its veto power to block the measure — a move that could have undermined US standing in the Arab world.
A US veto risked angering key Arab allies, including partners in the US-led coalition carrying out air strikes against the Islamic State group in Syria and Iraq.
The vote caps a three-month campaign by the Palestinians at the United Nations to win support for a resolution that sets a timeframe for ending the Israeli occupation.
On Monday, the Palestinians presented changes to the text, toughening up language on East Jerusalem as the capital of a Palestinian state and demanding an end to Jewish settlement building.