The proposal on the colleges needed 76 out of 150 votes to pass in the Shura Council, but fell three votes short of that goal. It called for the establishment of colleges that would train Saudi women in how to teach fitness and well- being.
Lina Almaeena, who is one of three council members that submitted the proposal, said 57 members against the measure with the rest abstaining.
Some of the kingdom's ultraconservatives shun the concept of women's exercise as "immodest" and say it blurs gender lines.
She has long been an advocate for women's access to sports and founded Jeddah United in 2006, the first sports club in Saudi Arabia to include women.
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Physical education is still not on the curriculum for Saudi girls in public schools, though some private schools offer physical education classes and sports to female students. There are also plans to license dozens of female- only gyms.
The kingdom discourages unrelated men and women from mixing and women cannot openly exercise in public.
Almaeena said she expected the proposal to have greater backing by Shura Council members because it supports the kingdom's Vision 2030 plan, which is a blueprint for a wide- reaching government overhaul to develop the society and the economy. It was introduced under King Salman by his son, Deputy Crown Prince Mohammed bin Salman.
Vision 2030 specifically calls for encouraging the participation of all citizens in sports and athletic activities. It says currently 13 per cent of the Saudi population exercises once a week. The government aims to bump that up to 40 per cent and raise life expectancy from 74 years to 80 years.