The Palestinians are hoping for a vote next week on a UN resolution demanding that Israel stop all settlement activities immediately and completely, a Palestinian diplomat said Thursday.

The draft Security Council resolution, obtained by The Associated Press, would reaffirm that all Israeli settlements in Palestinian territory occupied since 1967, including East Jerusalem, are illegal and constitute a major obstacle to the achievement of a just, lasting and comprehensive peace.

The latest Israeli-Palestinian peace talks broke down after three weeks in September in a dispute over Israeli settlements. The Palestinians say they will not negotiate as long as Israel builds homes for Jews in the West Bank and East Jerusalem, lands the Palestinians claim for a future state. U.S. mediators have returned to indirect talks to seek a way out of the impasse.

The United States, Israel's closest ally, has voiced opposition to settlement building, but it also opposes the resolution on grounds that it will not move both sides closer to a two-state solution in which Israel and the Palestinians could live side-by-side in peace. It remains unclear, however, if the U.S. would veto the measure or abstain in a vote.

The resolution puts the Obama administration in a difficult position because a veto would anger the Palestinians and its many supporters in the Arab world and elsewhere - and an abstention would anger the Israelis. Either way, the U.S. vote could complicate efforts to resume direct Israeli-Palestinian negotiations.

Palestinian President Mahmoud Abbas said last week in Brazil that the Palestinian draft used language similar to that used by U.S. Secretary of State Hillary Rodham Clinton, who has criticized settlements, so" we don't see why the U.S. would veto it."

Riyad Mansour, the Palestinian UN observer, has been meeting separately with the 15 Security Council members, as well as other UN ambassadors, to lobby for support for the resolution.

The Palestinian diplomat, speaking anonymously because consultations have been private, said the Palestinians are finalizing the text, possibly by Friday, and hope for a Security Council vote next week.

Karean Peretz, spokeswoman for Israel's UN Mission, stressed that the only road to peace is through direct negotiations.

She accused the Palestinians of repeatedly bypassing direct talks during the past year, which "only move us further away from returning to the negotiation table and reaching a two-state solution."

"Israel has demonstrated time and time again its commitment to peace and we hope that the international community won't allow these moves to divert both sides from reaching the real goal - peace and stability in our region," Peretz said.

The draft resolution calls on Israel and the Palestinians to continue negotiations and resolve all final status issues by September 2011 as called for by the Quartet of Mideast peacemakers - the U.S., the UN, the European Union and Russia. It also urges intensified international and regional diplomatic efforts to support and accelerate the peace process.