The US abstained on a UN Security Council resolution on Tuesday demanding Israel stop its siege of Yasser Arafat's compound, thereby allowing the measure to go into force.
The resolution, approved by the other 14 council members after 11 hours of negotiations, also called on the Palestinian Authority to ensure those responsible for terrorism were brought to justice.
The US has killed similar measures in the past by using its veto power in the council. But diplomats said Washington decided against doing so in order not to alienate Arab opinion during its campaign against Iraq.
"The resolution that we've adopted this evening was flawed in our view in that it failed to explicitly condemn the terrorist groups and those who provide them with political cover, support and safe haven in perpetuating conflict in the Middle East," US representative James Cunningham said.
The US refused to vote for the new resolution because it did not name the Syrian-based Islamic Jihad and Hamas groups as responsible for bombings in Israel last week.
The text was negotiated by Britain and France, which sponsored it along with Bulgaria, Ireland and Norway.
It "demands that Israel immediately cease measures in and around Ramallah, including the destruction of Palestinian civilian and security infrastructure."
It also demands the "expeditious withdrawal of Israeli occupying forces" from Palestinian cities toward positions held prior to September 2000, the date of a Palestinian uprising that has cost more than 2,000 lives.
Israeli forces wrecked Arafat's headquarters complex in Ramallah in the West Bank last Thursday after two suicide bombings killed seven people in Israel in the past week.
On Monday, US Ambassador John Negroponte introduced his own resolution to counter one proposed by Palestinians.
The US proposal also would have asked for an end to Israel's destruction of the Palestinian leader's compound.
The US draft contained unusually harsh language chastising Israel, saying its actions "aggravated" the situation and did "not contribute to progress on comprehensive Palestinian civil and security reforms."
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