"We feel sorry about the development," he said.
In Friday's year-end news conference that touched on her priorities for the next year, Rice said: "We think that Taiwan's referendum to apply to the United Nations under the name Taiwan is a provocative policy."
"It unnecessarily raises tensions in the Taiwan Strait and it comes with no real benefits for the people of Taiwan on the international stage. That is why we oppose this referendum," she added.
Taiwan, under its official name the Republic of China, lost its UN seat to China in 1971.
Taiwan's tireless bid
Efforts in the past 14 years to rejoin the world body using the name "the Republic of China" have been repeatedly blocked by Beijing. The two sides split at the end of a civil war in 1949.
John Negroponte, the US deputy secretary of state, said in August that Washington opposed a referendum because it would be a step to declaring full independence - a highly sensitive issue with China insisting Taiwan as part of its territory.
Democratic Progressive Party (DPP) led by Chen Shui-bian, Taiwan's president, is pushing for the controversial vote to be held alongside the March 22 presidential elections.
Meanwhile, Robert Gates, the US defence secretary, has dismissed concerns raised at a separate press conference that the referendum push could trigger a military reaction in the region.
"No, I'm not worried that there will be a military reaction. We obviously are watching it very closely," Gates said.
He said the Chinese would like the United States to speak out more, while Washington has urged Beijing to "continue to handle this matter in a political way".