New York, Feb 19 (DPA) The US Friday vetoed a resolution that received 14 votes in favour from the UN Security Council's 15 members, effectively killing the demand by Arab and Muslim countries to brand Israeli settlements "illegal".

US Ambassador Susan Rice cast a negative vote, which constituted a veto. The five permanent members with veto power are the US, Russia, France, Britain and China.

Rice said the veto should not be understood as US support of Israeli settlements.

"We reject in the strongest terms the legitimacy of continued Israeli settlement activity," she said after raising her hand to vote against the draft resolution.

A negative vote by one of the permanent members constitutes a veto.

The draft, which was supported by 130 countries including Europeans, had called for the Security Council to declare that "Israeli settlements established in the Palestinian territory occupied since 1967, including East Jerusalem, are illegal and constitute a major obstacle to the achievement of a just, lasting and comprehensive peace".

The draft said that Israel - "the occupying power" - should immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem.

It was the first US veto since 2006 and the first under President Barack Obama, which had tried to convince Palestinian President Mahmoud Abbas to withdraw the draft and accept a compromise in order to avoid the US veto.

Abbas and Palestinian organisations rejected the US offer, and the council took action on the draft knowing that the US veto would kill it anyway.

The US cast two vetoes in 2006 when the council tried to pass Arab-backed resolutions that demanded that Israel end its military operations against the Gaza Strip.

The council vote and the US veto capped a month of negotiations between Arab and US diplomats to work out a compromise. The draft was submitted Jan 18 after direct Israeli-Palestinian negotiations broke down because of Israel's plans to expand housing for Jewish people.