Israel says it needs the structure to protect it from Palestinian attacks
The United States has vetoed a United Nations Security Council resolution condemning Israel's controversial West Bank barrier.
The draft, introduced by Arab states, declared that the structure was illegal under international law and that construction must be halted.
Israel says the barrier is necessary to protect Israeli civilians from attacks by Palestinian gunmen and suicide bombers.
But Palestinians argue that it is encroaching on more Palestinian land and making a number of Israeli settlements in the border areas permanent.
Other international mediators had been urging Israel to end construction of the fence.
But the US - Israel's closest ally - had been less than vocal on the issue.
President George Bush had merely called the barrier a "problem".
The BBC's Greg Barrow at UN headquarters in New York says the Americans felt unable to support a resolution which they viewed as one-sided in its criticism of Israel.
US diplomats have argued that any resolution on the Middle East has to include a robust condemnation of the activities of Palestinian militant groups.
The vote came at the end of a day-long, bitter debate, with Israel's UN ambassador Dan Gillerman clashing with Palestinian observer Nasser al-Kidwa.
"The establishment of the expansionist conquest wall by the occupying power (...) is a crime of the same magnitude as a crime against humanity," Mr al-Kidwa said.
Mr Gillerman retorted: "No lie is so bold and audacious as the one which pretends that Israel's actions occur in a vacuum and are not in response to years and years of terrorism."
Most of the countries taking part in the debate criticised the construction of the barrier, saying it will inflame tensions.
Angola, Chile, China, France, Guinea, Mexico, Pakistan, Russia, Spain and Syria voted in favour of the resolution.
Bulgaria, Cameroon, Germany and Britain abstained. The US was the only one vote against the draft.