Nabil Abu Rudainah, spokesman for Palestinian President Mahmoud Abbas, said the US action "will further complicate the situation in the Middle East." The veto encourages Israel to evade the obligations of peace, he added.
Fourteen members of the UN Security Council voted for the resolution, which was blocked by the United States Friday. The draft called on Israel to stop building settlements on occupied Palestinian territories, including East Jerusalem.
Saeb Erekat, a member of Fatah's Central Committee, said the veto "is regrettable and cannot be justified or accepted in any way." He added that the US decision encourages Israel to build more settlements.
Tawfik Al-Tirawi, also a member of Fatah's Central Committee, called on the Palestinians to observe next Friday as "a day of rage" and demonstrations in the Palestinian territories to condemn the US vote against the resolution.
Yasser Abed Rabbo, secretary-general of the PLO's Executive Committee, said that after the US vote, the Palestinians won't consider the Americans a fair mediator in the peace process.
He said Palestinian leaders had decided to make a fresh attempt at the world body's General Assembly, which convenes in New York in September.
"Our decision now is to go to the General Assembly, to pass a UN resolution against the settlements and condemn them and to emphasize its lack of legitimacy.
"And then we will put forward a draft to condemn the settlements in the UN Security Council."
Hamas said the US veto was "arbitrary." Fawzi Barhoum, a Hamas spokesman, said: "The veto reveals the reality of the clear US support to what the Zionist enemy does against our people."
Barhoum called on the Palestinian Authority to cease negotiations and liaison with Israel. "Let's start a new phase to empower the internal Palestinian unity."
Egypt denounced the US veto, saying it damaged Washington's credibility as a peace broker. "The veto, which contradicts the American public stance rejecting settlement policy, will lead to more damage to the United States' credibility on the Arab side as a mediator in peace efforts," a Foreign Ministry statement said.
