The Palestinians’ bid for statehood at the United Nations will not improve daily life in the West Bank or Gaza. Instead, tensions between Israelis and Palestinians will increase, potentially leading to violence. As a result, the Palestinian state-building program, which is developing sustainable Palestinian institutions, will remain an essential tool for addressing these challenges. All parties involved, including the international community, will need to overcome a desire for punitive actions by working together on the state-building program in order to resolve shared day-to-day problems.

The statehood bid is raising Palestinian hopes that elevated international recognition will improve their daily lives through expanded rights. These lofty expectations will be unmet, however, because Israeli control of the West Bank and Gaza will remain in place regardless of any new Palestinian international status. These unmet expectations will increase Palestinians' tensions with Israel, which already views the U.N. move as a serious crisis. Heightened tensions on both sides will increase the probability of clashes.

Israelis and Palestinians are already planning steps to prevent violence following the U.N. meeting. Israelis are carrying out drills with nonlethal equipment and Palestinians are calling for peaceful protests in designated areas. Employing these crowd-control approaches may help limit near-term hostilities but they cannot prevent anger and attacks from escalating in the long term.

Ultimately, the only way to address Palestinians’ aspirations for statehood and ensure Israeli security is through negotiating a two-state solution. The United States, in coordination with the other Quartet members on Middle East peacemaking (the European Union, Russia, and the United Nations), is working toward this goal by urging the parties to restart peace negotiations based on parameters President Barack Obama set forth in May. This will become a more difficult task given the expected friction following the statehood bid.

The Palestinian state- and institution-building program will take on greater importance if Israelis and Palestinians do not engage in peace talks because the program provides a means for the parties to continue working together on mutual challenges. During the past two years, the program served as a basis for cooperation and shared progress. It improved governance, transparency, and accountability in the Palestinian government. The program also helped spur significant economic growth and began to reduce Palestinian dependence on foreign aid. Equally important, it improved law and order in the West Bank and decreased security threats to Israel.

This program is still the best win-win option available for Israelis and Palestinians. Palestinians, as part of the program, will need to continue rooting out corruption, improving transparency, reducing dependence on foreign aid, strengthening rule of law, and combating militant groups. Israel will need to continue easing its security footprint—such as removing obstacles to movement and access for Palestinians and transferring additional control to Palestinian security forces in the West Bank—as it has done in recent years.

In the wake of the U.N. meeting, the international community, particularly the United States, will play a critical role in supporting these efforts. The state-building program, for example, will continue to rely on foreign financial and technical support in the near future. For that reason, moves within Congress to cut funding to the Palestinian Authority if it proceeds with its statehood bid are counterproductive. Threatening to cut aid will not deter Palestinians from seeking statehood recognition as some in Congress believe. But it will deprive Israelis and Palestinians of one of the U.S. government’s most effective tools for maintaining regional stability and security.

Improving security and economic conditions in Gaza will also be essential for regional stability. Israel’s blockade of Gaza helps limit the flow of arms into the territory, but it also hurts the entire population, both supporters and nonsupporters of Hamas—the political-militant group in control of Gaza—while fomenting anger toward Israel. Israel’s partial opening of the Gaza blockade following the 2010 flotilla crisis, on the other hand, demonstrates the type of action Israel can take to improve conditions without benefiting Hamas. The United States helped shape this new Gaza policy and it will continue to have an important role in any future opening.

All parties will feel a strong desire for retaliatory responses after the U.N. meeting. But Israelis, Palestinians, and the United States will not benefit from harsh reactions. Recent years demonstrate that the two sides can transform the traditional win-lose paradigm into a win-win model by working together to resolve day-to-day problems. International actors, in particular the United States, will be needed now as much as ever to maintain progress.

Ian Bomberg is a Research Associate at American Progress.