Palestinians have been talking for months about petitioning the United Nations in September for a vote that would push them closer to statehood. Now, as the deadline for a decision nears, the top policy-makers in Ramallah are divided over precisely what course to take, according to Palestinian and western officials familiar with internal discussions on the matter.

The dispute is mainly over tactics—what request to put in front of the U.N. and how much emphasis to place on the entire initiative. But it reflects a broader disagreement over the extent to which Palestinians can afford to defy the United States, which opposes the U.N. gambit altogether and which provides Palestinians with hundreds of millions in annual aid.

“There are basically two competing approaches,” says Gabriel Fahel, a legal adviser to the Palestinian Ministry of Foreign Affairs who has been involved in discussions about the U.N. initiative. “Loosely speaking, it’s the Abbas camp on one side and the Fayyad camp on the other,” he told The Daily Beast.

Mahmoud Abbas is the 76-year-old Palestinian president, a veteran of negotiations with Israel who has come to believe peacemaking is impossible with Israeli leader Benjamin Netanyahu. Salam Fayyad is the prime minister of the Palestinian Authority, an American-trained economist with strong ties to leaders in Europe and the U.S.

According to the officials, Abbas has been advocating what the United States and Israel view as the more provocative measure: petitioning the U.N. Security Council to accept Palestine as a full-fledged member state. In the internal discussions, Abbas has depicted the move as a potential game-changer, providing Palestinians more leverage in the power dynamic with Israel and putting them on equal footing with the Jewish state in key international organizations.
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In contrast, Fayyad is worried about the effect of such a move on relations with American and European allies, whose aid money helps keep the Palestinian Authority afloat. And since the United States is likely to veto the Palestinian membership request when it comes to the Security Council, Fayyad believes the whole initiative could be an exercise in futility. (His office did not respond to a request for comment).

Instead, he’s offering a softer approach: asking the General Assembly to upgrade the status of the Palestinians from “observer entity”—as it is currently defined—to “observer state.”

Analysts agree that measure would be largely symbolic. But since the U.S. has no veto power in the U.N. General Assembly, it is more likely to pass. And even if it has few tangible implications, a huge show of support for Palestinian independence would help create pressure on Israel. Israel's Defense Minister Ehud Barak has described the potential scenario as a “diplomatic tsunami.”

The Security Council process would likely be more drawn out and might not come to a vote until next year, according to Fahel, the legal adviser. “It’s not a mechanical thing. What you get are a lot of consultations, a lot of negotiations behind closed doors to find other solutions or arrangements, which in itself can be a good thing.”

Both scenarios pose a problem for President Obama. Though he supports Palestinian independence, he has said it needs to come about through an agreement with Israel, not unilaterally. Already he’s facing calls to penalize the Palestinians (some congressmen have pledged to withhold aid if they go ahead with the initiative). On the other hand, an American vote at the U.N. against Palestinian statehood would surely erode Obama’s standing in the Arab world.

Palestinians have till the end of July to petition the Security Council for U.N. membership if they want the issue to be discussed in September. As the month winds down, pressure on Israel and the Palestinians to renew negotiations has intensified.

Tony Blair, a special envoy to the region representing the so-called Quartet—the U.S., Europe, Russia and the U.N.—told The Daily Beast he’s still hoping to find a formula that would get Palestinians to ditch the U.N. initiative.

“If can we reach a Quartet understanding on the principles that shape an agreement, I think it’s the only alternative to a major bust up in September.”