Egypt drafted, which does not mention the United States or President Trump by name, but does refer to "deep regret at recent decisions concerning the status of Jerusalem" and calls for "reversal of the negative trends on the ground that are imperiling the two-State solution".
The US was alone in voting against Monday's draft resolution at the Security Council, with the 14 other member countries voting in favour, including France and Britain, which are generally closely aligned with the US.
Al Jazeera reports that the draft "did not mention the United States by name", in an apparent effort to keep Washington from using its power of veto.
The veto cast by US Ambassador Nikki Haley highlighted Washington's isolation over Trump's announcement that the US embassy will be moved from Tel Aviv to Jerusalem, effectively ignoring Palestinian claims on the city.
The rare use of the U.S. veto to block the vote was not an embarrassment, Haley said, but should embarrass the other council members.
Haley told the council "the United States has never been more committed to peace in the Middle East", and called accusations that the U.S.is setting back the prospect for peace "scandalous".
"We commend President Trump for his efforts and energy in that direction, and we call on the USA administration to put forward concrete details, proposals as soon as possible to take that process forward".
Trump shattered decades of unwavering USA neutrality on Jerusalem on December 6 when he declared that the United States recognizes the divided holy city as Israel's capital and will move its embassy there.
Palestinian President Mahmoud Abbas, for his part, strongly attacked the United States and accused it of supporting Zionist work in Palestine since its inception.
Trump's decision to move the United States embassy from Tel Aviv to Jerusalem was a sovereign decision and "fully in line" with previous Security Council resolutions, Haley added.
The vetoed resolution would have demanded that all countries comply with 10 resolutions on Jerusalem, dating back to 1967, including requirements that the city's final status be decided in direct negotiations between Israel and the Palestinians.
Jerusalem, revered by Jews, Christians and Muslims alike, is home to Islam's third-holiest site and has been at the heart of the Israeli-Palestinian conflict for decades.
In an apparent rejection of the authority of the Security Council, Israel's ambassador to the UN, Danny Dann, said ahead of the vote: "Members of the council can vote again and again - for a hundred more times".
This has infuriated the Palestinians and Arab countries, which have strongly protested against the USA move. The settlements are in contravention of the global laws, including the Fourth Geneva Convention of 1949, which prohibits countries from moving population into territories occupied in a war. The United States is a genuine partner.in the Balfour Declaration...
Israeli Prime Minister Benjamin Netanyahu immediately thanked Haley, posting on Twitter: "Truth defeated lies".