A draft statement on Tuesday by Abdulaziz al-Nasser, the Qatari ambassador, would call on Israel to return all Palestinian prisoners to Palestinian custody and withdraw its forces from Jericho.
Diplomats said the 15-nation council would discuss the draft behind closed doors on Wednesday after al-Nasser revised it in response to council members' initial comments.
Palestinian UN Observer Riyad Mansour called on the council to "uphold international law" by supporting the Qatari measure.
He said the Israeli raid grew out of "a desire to negate the Palestinian elections" won by the Islamic group Hamas.
The text would almost certainly face a veto from the United States, Israel's closest ally, if brought to a vote in its current form, the diplomats said.
Qatar, the council's sole Arab member, put its draft forward after Israeli forces stormed a jail in Jericho where a senior resistance leader Ahmad Saadat was being held, seizing several hundred prisoners along with Saadat.
The jailed leader, accused by Israel of involvement in the 2001 killing of Rehavam Zeevian, the Israeli tourism minister, surrendered to the Israeli military at Jericho prison after it was torn apart in a tank and bulldozer assault, launched minutes after US and British monitors left the site.
the British Council in Gaza
US and British officials said the monitors left because the Palestinians had not made needed security improvements.
Palestinian protesters in the Gaza Strip and the West Bank captured nine foreigners in a display of anger at the pullout of the US and British monitors supervising Saadat's incarceration.
Two Australians, two French women, an American and a Swiss national seized at gunpoint were later released, but two French nationals and a Korean were being held. Rockets were also fired from Gaza into Israel, causing no casualties.
Ibrahim Gambari, the UN undersecetary-general for political affairs, told the council he was deeply concerned by the surge in violence that began with the Israeli prison raid.
"This violence has caused a number of casualties and created turmoil, bringing unnecessary suffering to the civilian population," he told the council. "Israel's violent incursion - as well as the Palestinian actions carried out in response - risk destabilising even further the already tense situation in the Middle East."
After hearing from Gambari, Argentina's ambassador, Cesar Mayoral, the council president for March, said members called on the parties to exercise maximum restraint, take steps to restore calm and immediately release those kidnapped in recent days.
Kofi Annan, the UN secretary-general, urged "an immediate end to the violence, respect for civilian lives, and urgent steps to restore calm", his chief spokesman Stephane Dujarric said.