The 14 other Security Council members voted in favor of the resolution.
The Obama administration’s veto is certain to anger Arab countries and Palestinian supporters around the world. An abstention would have angered the Israelis, the closest US ally in the region, as well as Democratic and Republican supporters of Israel in the US Congress.
The US opposes new settlements but says taking the issue to the UN will only complicate efforts to resume stalled negotiations between Israel and the Palestinians on a two-state solution.
The Palestinians have said repeatedly that they will not resume peace talks until Israel halts settlement building in the West Bank and East Jerusalem, which the Palestinians want as their capital.
Israeli-Palestinian peace talks collapsed just weeks after they restarted in September because Israel ended a 10-month moratorium on settlement construction.
The UN vote came a day after Obama and Palestinian President Mahmoud Abbas spoke by telephone, according to Palestinian Authority spokesman Nabil Aburdeneh. They discussed the uprisings in Egypt and Tunisia and the resolution on settlements, he said.
