A potentially dangerous confrontation looms in September over the question of Palestinian statehood, one that threatens significant negative consequences for all parties. It is in the interests of all constructive actors to find a compromise that avoids such a confrontation.

Palestinians are impelled by frustration and despair about the impasse in the peace process – a frustration shared by many Israelis, Americans and others. It is, however, Palestinians who live under occupation, which gives them a justified sense that the status quo is intolerable. The diplomatic impasse has created a demand for any mechanism for progress; hence the appeal of approaching the United Nations with a request for membership.

But as Palestinians started pursuing this policy, several crucial facts should be considered: First, the United States has indicated unequivocally that it would veto in the Security Council a Palestinian application for U.N. membership, making such membership impossible at this time. Moreover, the U.S. Congress has sent a message that U.N. action on Palestinian statehood would result in a cutoff of U.S. aid, and Washington is the single biggest donor to the Palestinian Authority.

Second, Palestinian hopes for securing support for U.N. membership from a unified European community have been dashed by the open opposition of some countries, such as Germany and The Netherlands, and by a lack of support from nations such as the United Kingdom and France, which hold key swing votes.

Third, Israel is threatening unspecified unilateral retaliation. Fourth, there is a significant danger of widespread outrage among Palestinians if a U.N. effort fails, with serious potential for unrest. Outrage can also be expected if a U.N. initiative succeeds but produces no improvement or even leads to a deterioration in the Palestinians’ living conditions.

The significant gains that Palestinians have made recently in building institutions and preparing for their state must not be put at risk. And, regardless of what happens at the United Nations, Israel must cease its policy of publicly adopting a two-state solution while simultaneously undermining that outcome with counterproductive actions.

Perhaps the most significant concern for Palestinians would be the potentially grave consequences of a U.S. veto in the Security Council on the question of statehood.

Last year, the United States vetoed a resolution regarding Israeli settlement activity. Despite claims among some Palestinians that this represented a political victory, the cost of that defeat was enormous. Since then, Israel has had a free hand in settlement expansion, with virtually no international, and even muted Palestinian, objections. If the veto of the resolution effectively killed the settlements issue, what would the consequences be of a veto on a statehood resolution?

There are, at least, options for avoiding this confrontation. Palestinian President Mahmoud Abbas and other Palestine Liberation Organization officials have repeatedly said that they prefer negotiations and have asked for clear terms of reference to be presented. In that event, they have promised to negotiate and shelve action at the United Nations.

The U.S. administration has been attempting to lay the groundwork for resumed negotiations on the basis laid out by President Barack Obama in May: talks based on the 1967 borders with mutually agreed-upon land swaps. Obama promised the Palestinians a “full and phased withdrawal of Israeli forces” from the area that will become the Palestinian state and called for Palestinian recognition of Israel as a “Jewish state.”

The Obama principles have yet to be translated into clear negotiating terms of reference. The Quartet – the United States, the United Nations, the European Union and Russia – has failed to agree on these ideas, but efforts continue with Tony Blair, the group’s representative, returning to the region to pursue discussions with Palestinian and Israeli leaders.

A confrontation could be avoided by crafting a resolution in the General Assembly that would upgrade Palestinian representation at the United Nations, with an outline of the final-status issues based on the Obama speeches. Such a compromise could produce a limited but tangible Palestinian diplomatic accomplishment, avoiding a veto of the statehood project in the Security Council.

There is no doubt that Palestinians, with the support of their allies in the Arab League, are well within their rights to seek United Nations membership and to push for bilateral recognition from the rest of the world after decades of occupation, failed resistance and negotiations.

But all parties must seriously evaluate the consequences of any action that could damage the real prospects for Palestinian statehood in the near term; further degrade relations with the United States, possibly leading to a cutoff in American aid; and yield no improvements in Palestinian living conditions under occupation.

Countries that support a potential Palestinian confrontation with the United States at the United Nations in September should be ready to shield Palestinians from its financial, political and security consequences. If not, they should help them find a workable compromise.