The unusual showdown threatens the future of a mission the council has routinely renewed for decades and deepens a dispute over the territory, most of which is controlled by Morocco but claimed by the Algeria-backed Polisario Front, which seeks an independent state.
Morocco's royal palace welcomed the non-renewal of the mission, saying its personnel and equipment should leave Western Sahara in the coming days. Morocco said it remained committed to the ceasefire in the territory.
Polisario representative Sidi Omar thanked Russia for vetoing a resolution that he said would "torpedo the foundations of the UN peace process."
The US-drafted resolution would have extended the mission for another year while cementing Morocco's autonomy plan as the only basis for talks to settle the half-century-old conflict and scaling back its military component.
Russia vetoed the resolution on Friday. The United States then vetoed a Russian draft that would have extended the mission's mandate for another year without those changes.
Unless the Security Council agrees to a last-minute extension, the mandate for the UN Mission for the Referendum in Western Sahara, known as MINURSO, will expire on Saturday.
Oxfam warned that losing the mission could put refugees at risk. Hostilities have persisted at low levels since Polisario said in November 2020 that it was resuming "armed struggle".
Last year, the Security Council dealt a blow to Polisario's ambitions when it backed Morocco's autonomy proposal as a basis for resolving the conflict and asked UN Secretary-General Antonio Guterres to submit a review of the peacekeeping mission.
The failed US resolution would have gone further, removing the reference to a referendum from the mission's name, renaming it the United Nations Mission in Western Sahara, or MINUSO.
Following the vote, US Ambassador Michael Waltz said a referendum had never taken place because of longstanding disagreements over voter eligibility.
"UN officials have been telling us this reality for 30 years," he said.
"Unfortunately, some members of this council have used their veto to preserve the letter 'R' for referendum in the mission's name, even though the United Nations has not been preparing to hold such a vote for decades," he added.
France and Britain, two other permanent Security Council members, along with eight non-permanent members, backed the US resolution and Morocco's autonomy plan. China, Somalia and Pakistan abstained.
Russia said the US draft went too far in endorsing Morocco's position on the disputed territory.
"We stress the fact that the Security Council cannot automatically predetermine matters relating to sovereignty," said Russia's UN envoy, Vassily Nebenzia.
"The Security Council must not give a blessing to such a one-sided approach. Therefore we were compelled to block the adoption of the draft."
Nebenzia called the US veto "the political murder of the mission."
With 155 military personnel, the mission, tasked with organising a referendum as part of a UN-brokered ceasefire, is set to cost $US62 million ($A88 million) in the fiscal year that started in June 2026, according to a UN Secretary General report.
While most Sahrawis live in Morocco-ruled Western Sahara, tens of thousands are estimated to be living in Polisario-run refugee camps in Algeria. The vetoed US resolution called for a census of the refugees.
