Avigdor Lieberman was asked on Tuesday during a closed meeting what will happen tomorrow night. The questioner hoped to hear the foreign minster's assessment of the vote due to be held in the UN General Assembly on recognizing Palestine as a non-member observer state, but Lieberman replied with typical cynicism: "It will be a good soccer game."

Actually, at the time of the vote in New York, Lieberman will be participating in the Saban Forum in Washington. He preferred not to attend the decisive debate and in his stead Israel's ambassador to the United Nations, Ron Prosor, will conduct the rearguard fight and address the General Assembly.

Lieberman's reply represents what he and his colleagues in the nine-man ministerial forum have realized in the past two days - that the Palestinian move in the United Nations is unavoidable, as is the humiliating and painful diplomatic defeat that Israel is about to suffer. Now Lieberman, Prime Minister Benjamin Netanyahu and their cabinet colleagues have to find their way home - both diplomatically and politically.

After long weeks of Israel viewing the Palestinian bid in the United Nations as a grave threat, the Prime Minister's Office and Foreign Ministry now have to back down. Sources associated with Netanyahu and Lieberman are trying to belittle the event in the United Nations and describe it as merely a technical and procedural vote or as a symbolic Palestinian victory devoid of diplomatic significance.

The new Israeli policy involves lowering its media profile. The haughty assertion that Israel will punish the Palestinians the day after the UN vote has disappeared. Lieberman's impassioned threats to bring down the Palestinian Authority have also been put in storage.

A senior diplomatic source pointed out that with regard to the Israeli reaction, "lowering the profile" will be key. He said that, despite the previous threats, Israel does not intend to cancel the Oslo Accords, either in whole or in part . The idea raised in the forum of nine ministers to announce the construction of 3,000 new housing units in the settlements was dropped because Netanyahu and the other ministers realized this would scuttle Israel's public diplomacy efforts.

"We examined different ways to react, but eventually the ministers realized that almost whatever we do will hurt Israel at least as much as it will hurt the Palestinians," the senior diplomatic source said. "If the [Palestinian] Authority collapses, it will fall on our heads. We don't have to draw fire immediately after the vote - it's preferable for the Palestinians to be under pressure to renew the negotiations, as they promised."

Israel's initial steps will be measured and careful. Israel will stop ignoring the Palestinians' infringement of agreements between the sides and will irritate PA President Mahmoud Abbas by insisting on enacting every clause of every one of the agreements. For example, in the coming months Israel will deduct a debt of NIS 700 million to the Israel Electric Corporation and other debts amounting to several hundred million shekels from tax revenues that it collects for the Palestinians. The significance of such a move, which Israel is allowed to make under the Oslo Accords, would be that for two or three months Israel will withhold the tax monies it normally transfers to the Palestinians every month.

Further reactionary steps will be finalized in the future. If the day after the vote the Palestinians will make do with celebrations in Ramallah and a renewal of negotiations with Israel, as they have declared, then no more punitive steps will be taken. But if Abbas opts to prosecute Israelis in the International Criminal Court in the Hague, the reaction will be harsh. "We will wait for a Palestinian move against Israel and then we will have legitimacy to react forcefully," the senior diplomatic source said.

The Foreign Ministry now estimates that at least 150 UN member states will support the Palestinians receiving observer status, including most of the EU member countries. A senior source in the Foreign Ministry said that recent days, when it became apparent that Abbas had no intention of backing down, have seen diplomatic erosion in favor of the Palestinians among the European countries on which Israel focused its diplomatic efforts.

First came France, which informed Israel last week that it intends to vote in favor of the Palestinians. But the most significant blow came from Britain. The government in London put significant pressure on the Palestinians to postpone the vote and even announced that it will not support the move, but on Tuesday Israel realized that this policy is not longer relevant. The British are now inclined to support the Palestinian move, especially in the wake of Operation Pillar of Defense in Gaza, which in British eyes strengthened Hamas, meaning that the moderate Abbas should be bolstered by his move in the United Nations.

The United Kingdom has made it clear to the Palestinians that it will support their measure in the United Nations if they guarantee that they will not seek to file criminal charges against Israeli officials with the ICC. The British did not state whether they were requesting oral or written guarantees from the Palestinians.

But the diplomatic erosion does not stop there. In light of the French and British position, the Foreign Ministry expects Spain to follow suit. Also the Netherlands and Italy, which were expected to vote against the move, will now probably abstain. The Foreign Ministry now expects at least 15 of the 27 EU member states to vote in favor of the Palestinians. Only Germany and the Czech Republic are expected to vote against.

The Foreign Ministry is now concentrating on damage limitation. Israeli ambassadors worldwide have been instructed to pressure every country to publish an announcement, regardless of how they will vote, emphasizing that the borders of the Palestinian state and the other core issues will be decided only by direct negotiations with Israel. The ambassadors have been asked to demand that the announcements will acknowledge that this symbolic decision does not change facts on the ground and does not recognize Palestinian sovereignty over the West Bank, Gaza Strip or East Jerusalem.