Venezuela was unable to overcome Guatemala's challenge for the seat in four rounds of voting for Latin America's regional, non-permanent seat being vacated by Argentina.
The fourth round went to Guatemala, 110 votes to 75 for Caracas. But Guatemala still failed to capture the council seat: to win, a country must get two-thirds of the votes from those member countries taking part in the polling, which meant at least 124 votes.
The fourth round though was an improvement for Venezuela, up from 116 votes to 70, with four abstentions in the third round. The next vote was scheduled to take place after 3:00 p.m. (1900 GMT).
The losses were a rebuke of Chavez, a thorn in the side of the Washington who has repeatedly said the United States wields too much power.
Venezuela and Guatemala have battled for the non-permanent seat for months, but Guatemala has the strong support of the United States.
Washington fears that Chavez, who in his recent address to the UN General Assembly said the podium still "smelled of sulphur" after US President George W. Bush had used it the day before, would be disruptive and oppose every US-led measure.
On Sunday, Chavez who has the security council seat at the center of his foreign policy, accused the United States of conducting a "dirty war" against Venezuela's candidacy.
"(Ambassador Francisco Arias) Cardenas told me that the battle has turned into hand to hand combat," Chavez said in speech at the opening of a suburban train line.
The representative from Chile, which is abstaining, said he would prefer a regional consensus.
"We abstained because the vision of Chile, and its preference from the beginning, has been for a unity candidate" from the region like on eleven previous occasions, he said.
On Friday, Venezuela's ambassador to the United Nations, Javier Arias Cardenas, told AFP he was optimistic about Caracas's chances.
"If people's true consciences are working, based on what they told us in passing, and many in writing, then we are confident," he said.
Last month, Secretary of State Condoleezza Rice said in an interview with the Wall Street Journal that the Security Council needed "responsible states" and not those who want to air their anti-American views at the expense of solving crucial problems.
The assembly meanwhile voted Belgium, Italy, South Africa and Indonesia to the four other open non-permanent seats on the council. The five countries elected on Monday will replace Denmark, Greece, Tanzania, Japan and Argentina, which will leave the council at the end of the year.
The UN Security Council is made up of 15 members, including five veto-wielding permanent members (China, United States, France, Germany and Russia) and 10 non-permanent members, five of which are replaced every year.
The five non-permanent members which will serve until the end of 2007 are Congo, Ghana, Peru, Qatar and Slovakia.

Copyright AFP (Agence France-Presse), 2006