Late September is fast approaching, and the stage seems set for yet another crisis in the Middle East. Palestinian leaders are determined to push for greater international recognition of their state at the upcoming annual session of the U.N. General Assembly. A large number of countries are reportedly poised to vote in Palestine's favor, much to the chagrin of the Israeli government, which has mounted a vigorous lobbying campaign against recognition.

A Palestinian state is long overdue. But though the Palestinian people are perfectly entitled to seek bilateral and multilateral recognition, their action at the United Nations could lead to a dangerous diplomatic confrontation. Palestinians might ask the Security Council for full U.N. membership, which would be vetoed by the United States, or take other actions in the General Assembly that would place it and its allies at odds with the United States, Israel, and major Western powers.

I just returned from the region, where I was struck by the complacent attitude about September among Palestinians, who, despite heightened public expectations, believe they are simply pursuing a diplomatic process that will strengthen their hand at the negotiating table. In contrast, the Israelis seem to regard it as a major national crisis. Both parties, however, are taking security measures in anticipation of possible unrest.

Palestinian President Mahmoud Abbas insists that he prefers negotiations and is not seeking a confrontation, while Israel continues to mobilize opposition to any U.N. initiative. Each side is focusing on Europe, which for its own strategic reasons wants to avoid a split vote but seems so far unable to reach a consensus. The United States has made clear its intention to veto any Palestinian application for full U.N. membership in the Security Council, and it opposes any other U.N. initiative.

A diplomatic confrontation is not in the interest of any party. For Israel, it could prompt an outburst of public anger and possible violence in the occupied territories that would be a security challenge at home and deepen its growing isolation abroad. For Palestinians, it could mean a return to more restrictive forms of control by Israeli occupation authorities, more checkpoints and roadblocks, as well as other forms of retaliation, including punitive economic measures. For the United States, it risks bringing back traditional anti-American sentiment front and center to Arab political discourse at a time when the country has been increasingly perceived as a positive force standing with the people against dictators.

The need for a compromise is more urgent than ever. The United States, through the Middle East Quartet, is engaged in intense efforts to find a formula to resume negotiations. It is not beyond hope or diplomatic skill to find broadly acceptable language for a resolution that acknowledges the Palestinian right to statehood. A diplomatic confrontation with potentially far-reaching implications on the ground remains a distinct possibility, however. No matter what happens at the U.N., it is important for all parties to start planning for the day after.

The first priority must be to prevent a flare-up of violence, which could extract a catastrophic human cost and set back the prospects for a two-state solution. Only extremists would benefit, and the United States will be blamed and inevitably be drawn into such confrontations.

The best counterweight to chaos is security cooperation between Palestinian and Israeli security forces. Over the last two years, this cooperation has reached unprecedented and by all accounts -- whether Palestinian, Israeli, or American -- exemplary levels. Security cooperation is as much in the Palestinian interest as it is in Israel's, because providing law and order is the sine qua non of governance. This cooperation must be preserved, requiring continued support for the Palestinian security services and a commitment to its integrity and its officers' morale. It will also require deploying American diplomatic and security assets on the ground to ensure that security cooperation is insulated from the diplomatic and political grandstanding that would inevitably follow a showdown at the U.N.

Once the dust from any potential diplomatic crisis settles, achieving a two-state solution will continue to be an American, Israeli, and Palestinian national security imperative. A peace agreement will require serious Israeli and Palestinian partners, which is why the collapse of the Palestinian Authority is not in American or Israeli interests. Nor will a deterioration of living conditions among Palestinians serve the cause of peace and moderation. Just look at Gaza.

Over the last two years, the Palestinian institution-building program has contributed to maintaining stability and prosperity. Crucially, it has created a vehicle through which progress between Palestinians and Israelis can continue even when diplomacy falters. This avenue should not be closed at this sensitive time when emotions are high, even if negotiations seem out of reach in the short term. That requires having the wisdom to see past diplomatic and political disagreements and instead build on what has been achieved by the Palestinians with international, and indeed Israeli, cooperation.

Palestinians have been steadily decreasing the amount they need from donors in recent years and are set to institute a program of austerity to help protect themselves from the vicissitudes of foreign-aid delivery and the changing attitudes of donor countries. The international community should match this responsible policy with a correspondingly defined and dependable delivery of aid.

The U.S. Congress can demand, and should secure, continued strict and transparent accountability for Palestinian finances. But cutting funding to the Palestinian Authority, or to international and U.N. agencies that operate in Palestinian areas -- as some in Congress are now threatening to do -- would contribute to an atmosphere of tension on the ground and play directly into the hands of extremist groups and their regional sponsors. Continuing support for the Palestinian institution-building program would maintain a much-needed anchor that can offset the potential negative impact of events in September, until meaningful negotiations again become possible.

Any cutoff of funds that threatens the important gains of the Palestinian institution-building program, which has done so much to improve the lives of Palestinians in the occupied territories -- or the security services, whose cooperation with Israeli forces has ensured law and order and greatly curtailed terrorism -- would not only punish Palestinians. It would also raise tensions, play into the hands of extremists, and create a far more serious "day-after" problem for Israel and the United States as well. Simply put, it would be a mistake that would make a difficult situation for all parties not only more difficult, but potentially unmanageable.