After a closed-door meeting, Arab nations agreed to request an emergency special session of the General Assembly, with some diplomats expressing hope it could take place as early as Friday.
Syria, the only Arab nation on the Security Council, had pressed for a resolution after Israel decided last week to "remove" Arafat in a manner and time to be decided. Israel blames Arafat for sabotaging the peace process and doing nothing to prevent terrorist attacks.
When the Arab-backed resolution was put to a vote Tuesday, 11 of the 15 Security Council members approved it. Britain, Germany and Bulgaria abstained, but the United States exercised its veto, maintaining the resolution was "lopsided" because it didn't condemn terrorist groups blamed for suicide attacks against Israel.
After a nearly two-hour meeting of Arab envoys on Wednesday, the Palestinian U.N. observer, Nasser Al-Kidwa, said the Arab Group would request a General Assembly vote on the resolution.
There will be a "slight adjustment" of the draft that failed in the Security Council, he said, adding, "We hope there will be broad support."
Arab and Islamic nations and the Non-Aligned Group of 116 mainly developing countries had pressed for a Security Council resolution, which is legally binding. General Assembly resolutions are not — and are not subject to vetoes — but they do reflect global opinion.
A new session of the General Assembly opened Tuesday. Nearly 90 world leaders are expected to address the annual two-week ministerial meeting, which starts next Tuesday.
On Wednesday, Arafat dismissed the Security Council veto, telling supporters at his West Bank headquarters: "No decision here or there will shake us. We are bigger than all decisions."
The Palestinians, who had generated wide global support for the resolution, said the vote showed the United States had lost its credibility as an honest broker in the Middle East. They feared the veto would be seen by Israel as a green light to move against Arafat.
"It's a black day for the United Nations," chief Palestinian negotiator Saeb Erekat said after the veto. "I hope that Israel will not interpret the killing of this resolution as a license to kill Arafat."
Senior Arafat adviser Nabil Abu Rdeneh told reporters on Wednesday the veto could jeopardize the U.S-backed "road map" for Mideast peace.
"The American veto is a real encouragement for the Israelis to continue their escalation," he said.
France said it regretted the U.N. resolution on Israel didn't pass.
The resolution "had a balanced message that we believed could bring a consensus," Cecile Pozzo di Borgo, the French Foreign Ministry spokeswoman, said in Paris.
International criticism against Israel mounted after Vice Prime Minister Ehud Olmert said Sunday that killing Arafat was an option, although the foreign minister later retreated.
The rejected draft resolution would have demanded "that Israel, the occupying power, desist from any act of deportation and ... threat to the safety of the elected president of the Palestinian Authority."
It also condemned Israel's targeted assassinations of militant leaders and Palestinian suicide bombings and called for a cessation of "all acts of terrorism, provocation, incitement and destruction."
Britain's Emry Jones Parry said his country's abstention was based on an assessment that the resolution was "insufficiently balanced."
Germany's envoy Gunter Pleuger said the council was "not living up to its responsibilities." He called on Israel to revoke its decision.