As you indicated, a veto would be irrational, inconsistent with previous US statements re settlement and extremely damaging to the official US line of promoting freedom, democracy and human rights. Why do it?? As this post shows Israel is not going to thank the US, it will merely criticise them more for interfering in their ILLEGAL settlement program. It serves no-one's interest to veto this resolution and it would destroy any legitimacy the US has on the international stage.
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Palestinians: One moderately wounded in Israeli strikes on southern Gaza Strip (Haaretz)