The US state department has described as inappropriate a ruling by the world court that Israel's West Bank barrier is illegal and should be torn down.
Israelis say the barrier keeps militants away
Spokesman Richard Boucher said the ruling - which is not binding - might be a damaging distraction from the roadmap peace process.
The International Court of Justice rejected Israel's arguments that it needed the barrier for self-defence.
But Israel said it would not accept the court's "unjust" decision.
The court said the construction of the Israeli "wall" was "tantamount to annexation" and impeded the Palestinian right to self-determination.
Israel insists the barrier is needed to keep out West Bank militants. Palestinians consider it a land grab.
Mr Boucher said that while Washington would study the UN court's ruling in the coming days, long-standing US opposition to the whole process was unchanged.
He said the debate about the controversial barrier was a political issue, not one for the International Court.
"We think the efforts of the parties ought to be placed on seizing the opportunity that can be created for progress on the roadmap," he added.
The US, along with several other countries including the UK, had argued the court should stay out of the issue.
The court's decision can serve as a basis for United Nations action.
Palestinian leader Yasser Arafat described the ruling as a "victory for the Palestinian people".
"We salute this decision condemning the racist wall," Mr Arafat told reporters at his West Bank headquarters.
Palestinian Prime Minister Ahmed Qurei said it was "a historic day".
"They [judges] said it has to be torn down and we say that we must tear it down," Mr Qurei said
But Israeli spokesmen were quick to dismiss the ICJ ruling.
"I believe that after all the rancour dies, this resolution
will find its place in the garbage can of history," said Raanan Gissin, a senior aide to Israeli Prime Minister Ariel Sharon.
"The court has made an unjust ruling denying Israel its right of self-defence."
Finance Minister Binyamin Netanyahu went even further, pouring scorn on possible action by the UN General Assembly - which took the issue to court.
"They [the GA] can decide anything there. They can say that the earth is flat. It won't make it legal, it won't make it true and it won't make it just."
BBC diplomatic correspondent Jonathan Marcus says the real question is what, if anything, will change now that the barrier has been declared illegal.
Arab governments are likely to seek an emergency session of the General Assembly to try to secure a resolution endorsing the court's decision.
But experts caution against any expectation of tough UN action - not least because of the US veto in the Security Council.