Lebanon, the Arab member of the U.N. Security Council, on Friday blocked a statement which would have called deadly attacks in southern Israel terrorism, diplomats said.
The move brought criticism from the United States which said the terrorism label is a "standard" Security Council description after such an attack.
Islamist militants killed eight Israelis in attacks on two buses on Thursday. In retaliation Israeli military planes have killed 14 Palestinians in Gaza.
The U.N. Security Council regularly uses the phrase "terrorist attack" to condemn such acts around the world. Lebanon opposed the use of the phrase this time because one of the buses was carrying Israeli soldiers, diplomats said.
Lebanon had also wanted a reference in the statement, or a separate statement, which condemned Israel's expansion of settlements in Palestinian territories which were announced this week.
A council statement requires unanimity to be passed.
"This is standard language on terrorist acts, which this council has adopted many times," U.S. deputy ambassador Rosemary DiCarlo said of the blocked draft statement.
"We think the council has to speak out on this issue. We find it regrettable that because of one delegation we could not issue that in a timely manner," she told reporters.
Israel's U.N. ambassador Ron Prosor reacted with anger.
"It is outrageous that the Security Council did not clearly condemn the deliberate and appalling murder of many innocent Israeli civilians, which occurred yesterday in a series of coordinated terrorist attacks," Prosor said in a statement.
"It is no coincidence that Lebanon -- the only member of the council that obstructed this statement -- is itself dominated by a terrorist organization," he said referring to Hizbullah.
Palestinian envoy to the U.N., Riyadh Mansour, said "we condemn the killing of innocent civilians regardless of where they are." But he said the council should also condemn the deaths of civilians in Gaza and the Israeli settlements.
"It is very unfortunate that the Security Council was unable to reach a common understanding in a balanced way," he told reporters.
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