The United States intended to allow the UN Security Council to approve a resolution demanding an end to Israeli settlement building, two Western officials say, marking a major reversal of US practice of protecting Israel from such criticism.
Egypt, which had proposed the draft resolution, abruptly put off a vote that had been scheduled for Thursday afternoon with diplomats saying Cairo had acted under pressure from Israel and to avoid alienating US President-elect Donald Trump.
The two Western officials said US President Barack Obama had intended to abstain from the vote, a relatively rare step by the United States to register criticism of the building on occupied land that the Palestinians want for a state.
US officials have voiced growing fears that a "two-state" solution is imperilled by Israeli settlement building and so have been more willing to voice open criticism of it, including, the two officials said, via Thursday's planned vote.
In a sign that they feared Obama might withdraw the US' long-standing diplomatic protection for Israel, Trump and Israeli Prime Minister Benjamin Netanyahu urged the White House to veto the draft resolution.
President Abdel Fattah al-Sisi of Egypt, which in 1979 became the first Arab nation to make peace with Israel, called Trump on Thursday, a Trump transition official said, saying they spoke broadly about laying the ground for Middle East peace.
Mr Sisi's office said the two leaders spoke.
"The presidents agreed on the importance of affording the new US administration the full chance to deal with all dimensions of the Palestinian case with a view of achieving a full and final settlement," said presidency spokesperson Alaa Yousef.
The resolution would demand Israel "immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem" and it said the establishment of settlements by Israel has "no legal validity and constitutes a flagrant violation under international law".
Egypt is currently a Security Council member and worked with the Palestinians to draft the text.