United Nations ( CNN ) -- The United States vetoed Friday a U.N. Security Council resolution that would have declared Israeli settlements in the West Bank illegal . U.S . Ambassador to the United Nations Susan Rice said that while the United States agrees about `` the folly and illegitimacy of continued Israeli settlement activity , we think it unwise for this council to attempt to resolve the core issues that divide Israelis and Palestinians . '' The veto is the first to be used under the Obama administration . Ambassador Riyad Mansour , the permanent observer of Palestine to the United Nations , objected to the veto in a statement following the vote . `` The proper message that should have been sent by the Security Council to Israel , the occupying power , is that its contempt of international law and the international community will no longer be tolerated , '' he said . `` We fear , however , that the message sent today may be one that only encourages further Israeli intransigence and impunity . This must be remedied . '' Rice noted conversations in recent days between U.S. and Palestinian leaders in an attempt to compromise on the issue of Israeli settlements . `` In recent days , we offered a constructive alternative course that we believe would have allowed the council to act unanimously to support the pursuit of peace , '' she said . `` We regret that this effort was not successful and thus is no longer viable . '' Israel praised the veto , saying in a statement that the decision `` contributes to the resumption of the diplomatic process and ( it ) regrets that the other Security Council members have refrained from making the same contribution . '' U.S. President Barack Obama on Thursday called Palestinian Authority President Mahmoud Abbas to discuss the resolution and speak about alternatives to a Security Council vote , according to a diplomatic source . Among the options that had been floated , American and Palestinian officials said , was the issuance of a Security Council presidential statement , which is weaker than an actual resolution . Obama told Abbas that if he did n't withdraw the resolution , it would put the United States in an awkward position and that U.S.-Palestinian relations would suffer as a result , the source said . `` Well , there were attempts at persuasion , ( but ) let me put it politely : We are even more persuaded by the rights of the Palestinian people , '' said Hanan Ashrawi , a veteran Palestinian legislator and Palestine Liberation Organization executive committee member . `` We are more committed to international law and to the requirements of peace , and all these require that settlement activity should stop and that the Security Council should take a resolution condemning all settlement activities as being illegal and as being in direct contradiction of the requirement of peace . '' The PLO met Friday and decided to move forward with the vote , the diplomatic source said , adding that Abbas felt that at a time when so many leaders are either being toppled or facing massive protests , it would make him look weak if he opted for an alternative course . The Palestinian territories have not had the kinds of demonstrations seen in many Arab countries , but the Fatah leaders of the Palestinian Authority have been under criticism since Al-Jazeera published secret papers claiming to reveal that Palestinian officials were prepared to make wide-ranging concessions in negotiations with Israel . The Obama administration has been critical of Israeli settlement construction but has not gone as far as to call it `` illegal . '' Rice reaffirmed the U.S. stance Friday , saying after the vote that Friday 's veto should not be `` misunderstood to mean we support settlement activity . '' `` On the contrary , we reject in the strongest terms the legitimacy of continued Israeli settlement activity , '' she said . Since the breakdown of American-brokered talks with Israel in September over the issue of settlements , the Palestinian Authority has been pursuing a policy aimed at unilaterally declaring a Palestinian state by September based on borders from 1967 and in recent months has won recognition from a number of South American countries . The United States and Israel oppose the unilateral efforts , insisting that all issues in the conflict must be dealt with through direct negotiations . Following the vote , Israel joined the United States in once again calling for direct negotiations . `` Only thus , and not through seizing the Security Council , will it be possible to advance the peace process so as to benefit both parties and to serve the cause of peace and security throughout the region , '' said a statement released by Israel 's Ministry of Foreign Affairs . The American Israel Public Affairs Committee also praised the veto , saying the action prevented `` another one-sided , anti-Israeli resolution from being enacted by the U.N. Security Council . '' CNN 's Kevin Flower and Elise Labott contributed to this report .
NEW : Veto ` ` encourages further Israeli intransigence , '' observer of Israel ' . The veto is the first to be used by the U.S. under the Obama administration . U.S . Ambassador to Israel : It 's unwise for Security Council to try to resolve key divisive issue . The Palestinian proposal aimed to make Israeli settlements in the West Bank illegal .