The US ambassador to the UN, John Bolton, said on Thursday that the draft, even after three days of intense negotiations, "was disproportionately critical of Israel, and unfairly so, and needlessly so".
The Palestinian UN observer, Riyad Mansour, accused Washington of "shielding and protecting Israeli activities and aggression against the Palestinian people".
"It was obvious that many of their concerns were accommodated, but yet they kept coming back and coming back for additional things. It was obvious they did not want the Security Council to have a position," Mansour said.
Washington does not have formal veto power when it comes to council statements, but it was able to block the draft because council rules require that statements be supported by all 15 members.
During Thursday's closed-door negotiations, the United States effectively killed the text by seeking amendment after amendment until Qatar, the council's sole Arab member, gave up the fight.
Asked by reporters to confirm that Washington alone had opposed issuing the statement, Bolton said, "If I were the only holdout, I'd be proud of that fact."
Qatar, acting on behalf of the Arab group at the United Nations, the 57-nation Organisation of the Islamic Conference and the Non-Aligned Movement of 112 nations, requested an open council debate on the Middle East, which was scheduled for Monday afternoon.
"I don't see that that meeting is going to be productive, because I don't think the Security Council is an exercise in group therapy," Bolton said.
Mansour predicted more than 150 UN, member-nations would address the meeting, to demonstrate that the overwhelming majority of UN members were "on the side of justice and international law".
The draft statement, after three days of revisions directed at toning it down, expressed concern about rocket attacks on Israel launched from Gaza and the escalation of Israeli shelling of Gaza, which Israel says was meant to end those attacks.
It urged both sides to comply with international law and to refrain from steps that could escalate the situation.
It called on the Palestinians "to take a clear public stance against violence and to take firm measures to halt rocket attacks and suicide bombings". And it urged renewed action towards the creation of a viable Palestinian state living side by side with Israel in peace and security.
An Israeli soldier carries an artillery
shell to fire on Gaza on Tuesday
Israel has increased deadly air strikes and shelling of Gaza in what it says is a response to militants firing rockets into Israel. The attacks have intensified since the resistance group Hamas took over governing the Palestinian territories after winning a January election.
The Jewish state says it is not intentionally attacking civilians and has warned residents to leave parts of northern Gaza from where militants often launch makeshift rockets.