Barack Obama has told Palestinian President Mahmoud Abbas he will veto his bid for UN membership, as he tried to persuade him to drop the plans.
But Mahmoud Abbas vowed to press ahead during a meeting with the US president, the White House said afterwards. Mr Obama had told the UN General Assembly a Palestinian state could only be achieved through talks with Israel. But French President Nicolas Sarkozy warned a veto could spark another cycle of violence in the region.
Diplomatic efforts for Palestinian UN membership have intensified, with Mr Abbas preparing to submit a written application to Secretary General Ban Ki-moon in New York on Friday. Thousands of people rallied in the West Bank on Wednesday in support of the move.
'Badge of honour'
If Mr Ban approves the request, the Security Council will examine it and vote on it. In order to pass, it would need the backing of nine out of 15 council members, with no vetoes from the permanent members.
However, Mr Obama had indicated the US will use its veto, leaving Western diplomats trying to find ways to put off the voting process to buy more time. In his speech, President Obama praised the way Arabs in Egypt, Libya and Tunisia had seized their freedom. But even with the prospect of the US vetoing the Palestinian UN bid, the Palestinians are claiming some victories - they've put the issue of their independence back on the international agenda.
The president's speech was as much about the politics of his own re-election bid next year as it was about the politics of making peace. His leading Republican opponent has accused him of appeasing the Palestinians. Mr Obama said nothing that Israel and its friends would not like.
That may well be good for the Israeli government. It isn't necessarily good for Middle East peace.
And the US president made his position clear to both Israeli Prime Minister Benjamin Netanyahu and Mr Abbas during meetings late on Wednesday. "We would have to oppose any action at the UN Security Council including, if necessary, vetoing," White House national security council spokesman Ben Rhodes said after Mr Obama met Mr Abbas. Mr Netanyahu told reporters that Mr Obama deserved a "badge of honour" for his defence of Israel.
However, senior Palestinian negotiator Nabil Shaath argued that Palestinian UN membership was "morally, legally and politically acceptable in every way".
Mr Sarkozy urged a compromise, suggesting the General Assembly give the Palestinians enhanced status as a non-member state to allow a clear timeline for talks - a month to start negotiations, six months to deal with borders and security and a year to finalise a "definitive agreement".
A vote on enhanced status - enjoyed by others such as the Vatican - would not require a Security Council recommendation but a simple majority in the General Assembly, where no veto is possible.
French Foreign Minister Alain Juppe said any UN vote on the issue was in any case "several weeks" away. Mr Obama had earlier told the General Assembly: "Peace will not come through statements and resolutions at the UN. "There is no short cut to the end of a conflict that has endured for decades. Ultimately, it is Israelis and Palestinians - not us - who must reach agreement on the issues that divide them: on borders and security; on refugees and Jerusalem."
Palestinians say their bid for statehood has been inspired by the Arab Spring, and is the result of years of failed peace talks. In the West Bank on Wednesday, schools and government offices were shut to allow for demonstrations backing the UN membership bid in Ramallah, Bethlehem, Nablus and Hebron.
While UN recognition would have largely symbolic value, the Palestinians argue it would strengthen their hand in peace talks. Mr Abbas's spokesman, Nabil Abu Rudeina, said after Mr Obama's speech: "The end of the Israeli occupation and a Palestinian state are the only path to peace.
"We will agree to return to the negotiations the minute that Israel agrees to end the settlements and the lines of 1967."
In his meeting with Mr Obama, Mr Netanyahu said direct negotiation was the only way to achieve a stable Middle East peace. The last round of talks broke down a year ago.
The "quartet" of US, European, Russian and UN mediators aims to give the two sides a year to reach a framework agreement, based on Mr Obama's vision of borders fashioned from Israel's pre-1967 boundary, with agreed land swaps.
Efforts are now reportedly under way to provide a basis for resumed peace negotiations, but work by mediators has yet to produce guidelines for the resumption of talks.