The Palestinians are bracing for possible punitive reactions by the U.S. and Israel if they go ahead with plans to seek U.N. General Assembly recognition of "Palestine" as a non-member observer state, according to an internal document obtained Thursday.

Palestinian President Mahmoud Abbas, backed by the Arab League, is ready in principle to take this step, but hasn't decided whether to submit the request when the General Assembly convenes in September or to wait until after the U.S. presidential election in November.

A senior Palestinian official said Abbas leans towards waiting until after the U.S. vote, in line with a U.S. request, to avoid further strain to his relationship with the administration of President Barack Obama. A Palestinian U.N. bid in September could hurt Obama's re-election efforts by inserting the disruptive Mideast conflict into the campaign.

However, some members of Abbas' inner circle are pushing for a September bid, arguing that the Palestinians have gained nothing by trying to appease the U.S. "We have nothing to lose from the Americans," said Hanan Ashrawi, a member of the PLO Executive Committee. "What we need is to move fast."

The final decision is up to Abbas.

The Palestinians seek General Assembly recognition of a state of Palestine in the West Bank, Gaza and east Jerusalem, territories Israel captured in 1967. While such a nod would be largely symbolic, they would gain firm international approval of the pre-1967 frontier as the border between Israel and a future Palestine.

An upgraded U.N. status would also allow the Palestinians to join various organizations of the world body.

Palestinian officials have said they have the required votes in the General Assembly to win recognition.

A bid last year to win full U.N. membership for Palestine, rather than as an observer state, failed because the Palestinians did not have sufficient support in the U.N. Security Council.

Israel and the U.S. are vehemently opposed to the Palestinian campaign for international recognition, saying a Palestinian state can only be established through negotiations with Israel.

The last round of talks broke off in 2008, and efforts to revive them failed because of deep disagreement between Abbas and Israeli Prime Minister Benjamin Netanyahu over the terms for negotiations.

Abbas has said his U.N. bid is meant to create additional leverage for the Palestinians and not to bypass negotiations. The Palestinians fear that Israel is systematically blurring the 1967 lines by expanding settlements on occupied lands; some 500,000 Israelis now live on war-won land.

Late last month, Abbas won Arab League backing for his planned General Assembly bid, but the league's foreign ministers will only make a decision on the timing when they meet again in Cairo in early September.

An internal Palestinian document, prepared by the PLO's Negotiations Support Unit and obtained by The Associated Press on Thursday, laid out the pros and cons of seeking U.N. recognition.

On the downside, both Israel and the U.S. have a whole arsenal of punitive measures at their disposal, the document said. The U.S. could close the PLO mission in Washington, suspend millions of dollars of aid to the Palestinians or withhold contributions to any U.N. agency the Palestinians try to join, the document said.

Possible Israel reactions could range from canceling interim peace deals, annexing parts of the West Bank or increasing restrictions on Palestinian trade and movement, the document said.

The document said all Palestinian institutions should get ready for any of these scenarios. The paper was presented to the Arab League last month and on Wednesday was discussed by leaders of Abbas' Fatah movement.

"We discussed the different scenarios ... and decided to go (to the General Assembly) regardless of the pressure and the threats," said Mahmoud Aloul, a Fatah leader. "The date is up to the Arab League ... For us, the sooner the better."

Israeli government officials said the Palestinians should focus on renewing talks with Israel instead of seeking international support. "If the Palestinians really wanted to improve the situation here on the ground and try to take the first step toward some reasonable solution of the conflict, they should have invested all their efforts in diplomatic moves in the region," said Foreign Ministry spokesman Yigal Palmor.

Israel says it is willing to resume talks at any time, but refuses to halt settlement expansion or recognize the 1967 lines as the base for future border talks. Abbas says that talks are pointless under such conditions.