The US has effectively stopped the United Nations from recognising a Palestinian state by casting a veto in the Security Council to deny Palestinians full membership of the world body.
It vetoed a draft resolution that recommended to the 193-member UN General Assembly that "the State of Palestine be admitted to membership" of the UN.
Britain and Switzerland abstained, while the remaining 12 council members voted yes.
"The United States continues to strongly support a two-state solution. This vote does not reflect opposition to Palestinian statehood, but instead is an acknowledgment that it will only come from direct negotiations between the parties," deputy US ambassador to the UN Robert Wood told the council on Thursday.
Palestinian President Mahmoud Abbas condemned the US veto as "unfair, unethical, and unjustified".
Palestinian UN ambassador Riyad Mansour, at times emotional, vowed to continue the push for full membership.
"The fact that this resolution did not pass will not break our will and it will not defeat our determination. We will not stop in our effort," he said.
The Palestinian effort for full UN membership came six months into a war between Israel and Hamas in Gaza, and as Israel is expanding settlements in the occupied West Bank.
Israel's Foreign Minister Israel Katz commended the US for casting a veto.
"The shameful proposal was rejected. Terrorism will not be rewarded," he said.
Israel's UN ambassador Gilad Erdan addressed the 12 council members who voted in favour of the draft resolution.
"It's very sad because your vote will only embolden Palestinian rejectionism even more and make peace almost impossible."
The Palestinians are currently a non-member observer state, a de facto recognition of statehood that was granted by the UN General Assembly in 2012.
But an application to become a full UN member needs to be approved by the Security Council and then at least two-thirds of the General Assembly.
Britain's UN ambassador Barbard Woodward said the focus should be on Gaza for now.
"We believe that such recognition of Palestinian statehood should not come at the start of a new process, but it doesn’t have to be at the very end of the process. We must start with fixing the immediate crisis in Gaza," Woodward told the council.
The UN Security Council has long endorsed a vision of two states living side by side within secure and recognised borders.
Palestinians want a state in the West Bank, east Jerusalem and Gaza Strip, all territory captured by Israel in 1967.
Algeria's UN ambassador Amar Bendjama argued before the vote that admitting Palestinians to the United Nations would strengthen rather than undermine the two-state solution.
"Peace will come from Palestine's inclusion, not from its exclusion," he said.
The Palestinian Authority, headed by Abbas, exercises limited self-rule in the West Bank. Hamas ousted the Palestinian Authority from power in Gaza in 2007.
Israel is retaliating against Hamas in Gaza over an October 7 attack on southern Israel led by the militant group.
Israel says about 1200 people were killed and more than 250 people were taken hostage in the assault, and Gaza health authorities say Israel has killed nearly 34,000 people in its offensive in Gaza since then.
UN Secretary-General Antonio Guterres said recent escalations made it even more important to support efforts to find lasting peace between Israel and "a fully independent, viable and sovereign Palestinian state".
"Failure to make progress towards a two-state solution will only increase volatility and risk for hundreds of millions of people across the region, who will continue to live under the constant threat of violence," he told the council earlier on Thursday.
