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You're right, BBC's Paul Reynolds:
The problem was the definition of terrorism.

There have been a number of UN resolutions against terrorism in general and against specific acts, such as hijackings and bombings, but a clear and agreed definition has been lacking.
(snip)
In the end, no definition was agreed though terrorism "in all its forms" is condemned.

And here's the Guardian's analysis:

Campaigners and diplomats who favoured a bold approach put much of the blame for the failure on John Bolton, the US ambassador to the UN, who introduced hundreds of late changes to the original document.
by ask on Wed Sep 14th, 2005 at 07:16:12 AM EST
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