When an offer is rejected, the offer is null and void without further notice. If you wanted to continue negotiations you would have needed to resubmit your offer. A seller has the right to work with whomever they please and they were not obligated to let you know that another offer had come in. I'm sorry that you are facing this. Let us know if you have any other questions.
If the house has not closed yet, you might be able to submit a back up offer on more acceptable terms to the seller, then should the offer they have already accepted not go through for whatever reason, they would then come back to you.
This is yet another reason why it's best to hire your own agent to represent YOUR best interests as the prospective buyer.
As Cameron notes, if an offer is rejected, that's the end of your offer. Once it was rejected, you could have made another offer.
You had an opportunity...by making your offer. There's no obligation for a seller to contact buyers who submitted an offer soliciting another offer.