When it emerged that Washington would not use its veto to block the resolution, Israeli officials asked US President-elect Donald Trump to intervene.
Trump called Egypt's President Abdel Fattah al-Sisi, who agreed to delay the vote.
Settlements are Israeli villages, towns and even cities built on territory Israel seized during the 1967 war.
Some 430,000 Israeli settlers currently live in the West Bank, along with 2.6 million Palestinians.
A further 200,000 Israelis live in east Jerusalem, along with at least 300,000 Palestinians, who want to make east Jerusalem the capital of their future state.
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From the 1970s, Israel established a network of settlements throughout the occupied West Bank.
The Oslo accords of 1995 divided the territory into Israeli and Palestinian-governed zones meant to lay the ground for a future Palestinian state, but Israel continued to build and expand settlements there.
The United Nations and most of the international community see Israeli settlements in the West Bank and in east Jerusalem -- which Israel annexed in 1980 -- as illegal.
Many Israeli settlers moved to the West Bank and east Jerusalem in search of affordable housing.
The government encouraged them to move to cities such as Ariel, Maale Adumim and the ultra-Orthodox settlements of Beitar Ilit and Modiin Ilit.
There are also many national-religious hardliners who see living in the biblical lands of Judea and Samaria as fulfilling a divine promise.
Hundreds of them live near the Cave of the Patriarchs in Hebron, a holy site for both Jews and Muslims and a focal point of violence between Israelis and Palestinians.
The Palestinians want Israel to withdraw from all land it occupied in the 1967 Six-Day war and to dismantle all Jewish settlements, although they have accepted the principle of minor land swaps equal in size and value.
Israel rules out a full return to pre-1967 borders but is ready to pull out of some parts of the West Bank while annexing its largest settlement blocs which are home to the majority of the settlers in the territory.