The United States last night vetoed a UN Security Council resolution to condemn Israel for assassinating Hamas leader Ahmed Yassin.
The Bush administration, alone among major powers in not condemning Monday's assassination, rejected the resolution because it did not also denounce Hamas for suicide bombings in Israel.
The vote was 11 in favour, with three abstentions and the US veto.
"Israel's action has escalated tensions in Gaza and the region and could set back our effort to resume progress toward peace," US Ambassador Mr John Negroponte said in a statement before the vote.
"This Security Council does nothing to contribute to a peaceful settlement when it condemns one party's actions and turns a blind eye to everything else occurring in the region," Mr Negroponte said.
Washington's "no" vote killed the resolution because it is one of the five permanent members of the council with veto power.
Britain, Germany and Romania abstained after Algeria, negotiating for Arab nations, rejected an amendment they wanted that would have condemned "atrocities" against Israelis.
The measure was supported by China, Russia, France, Angola, Chile, Pakistan, Spain, Algeria, Benin, Brazil and the Philippines.
Palestinians accused the United States of giving Israel a licence to kill by their decision. "I'm afraid this US veto will be taken by Israel as encouragement to continue on the path of violence and escalation, assassinations and reoccupation [of Palestinian territory]," Palestinian cabinet minister Mr Saeb Erekat said.
Hamas political leader Mr Mohammad Ghazal, calling the United States the "chairman of the axis of evil in the world", said the veto was "Israel's green light to carry out assaults and crimes".
Israeli forces shot two Hamas members in wetsuits who came ashore near a Jewish settlement last night. The group described the raid as the prelude to "earthquake-like operations" to avenge Yassin's death.
Israel has dismissed a growing international outcry over the assassination of Yassin, the quadriplegic spiritual leader of Hamas who was killed in an air strike outside a mosque in Gaza City.
Hamas said it would target Prime Minister Ariel Sharon and other top officials to avenge Yassin's death.
Mr Khaled Meshaal, Hamas's political chief living in exile in Syria, said yesterday attacks would be confined to Israel and the Palestinian territories despite US warnings to its citizens of a heightened security risk.