Palestinian diplomats have circulated a draft resolution to U.N. member states that calls for recognition of "Palestine" as an observer state.

The draft resolution could be put to a vote in the 193-nation U.N. General Assembly later this month, Reuters reported this week.

If approved, the resolution would "accord to Palestine Observer State status in the United Nations system, without prejudice to the acquired rights, privileges and role of the Palestine Liberation Organization as the representative of the Palestinian people," according to Reuters.

The United States and Israel have warned that the Palestinians could face retaliatory moves if the initiative passes.

Israeli Foreign Minister Avigdor Lieberman convened an urgent meeting in Vienna of Israeli diplomats serving in Europe to create a strategy to counter the initiative, the Jerusalem Post reported.

The Palestinian draft resolution says the Palestinian Authority's is committed to the "two-state solution" in which Israel and an independent Palestinian state would co-exist in peace.

The Palestinians are currently considered an observer "entity" at the United Nations. Acceptance of the Palestinians as a non-member state, similar to the Vatican's U.N. status, could grant the Palestinians access to bodies like the International Criminal Court in The Hague, where they could file complaints against Israel. 

The status upgrade seems certain to win approval in any vote in the General Assembly, which is composed mostly of post-colonial states historically sympathetic to the Palestinians. Palestinian diplomats also are courting European countries to further burnish their case.

The Palestinian Authority last year sought full U.N. membership. The bid failed because of U.S. opposition in the U.N. Security Council.

"Observer status" does not need approval of the Security Council, where the United States wields a veto.

The Obama administration and leading lawmakers in Congress has suggested that funding for the Palestinians and for the United Nations could be at risk if the Palestinians seek a U.N. upgrade.

Israel and the United States say bids for statehood recognition are unacceptable in the absence of direct peace talks.

P.A. President Mahmoud Abbas has said he will not return to talks left off in 2010 unless Israel freezes settlement building.