Three Republicans, Senators John McCain, Susan Collins and Lisa Murkowski, crossed party lines to join Democrats in a dramatic 49-to-51 vote to kill the bill. The debate began just before 1:30 a.m. (0530 GMT) on Friday morning.

Republican leaders had decided to vote on a pared-down proposal to repeal portions of Obamacare known as the "skinny bill" after failing to reach consensus on a more comprehensive measure after the U.S. House of Representatives approved their bill in May.

"This is clearly a disappointing moment," Senate Majority Leader Mitch McConnell said on the floor after the vote.

"I think the American people are going to regret that we couldn't find a better way forward," he said.