Palestine this evening achieve recognition by the UN General Assembly as a non-member observer state.

138 countries voted in favour, nine against with 41 abstentions.

The result was greeted with cheering and applause in Ramallah although it is not expected to change much in real terms.

Palestinian President Mahmoud Abbas said before the vote that a 'yes' vote would mean that the UN was handing Palestine its birth certificate.

The Israeli and US representatives said peace with two states for two peoples could only be achieved through direct negotiations. The US said the resolution was 'unfortunate and counter productive'.

Prior to the vote US Deputy Secretary of State William Burns made a personal appeal to Abbas promising that President Barack Obama would re-engage as a mediator in 2013 if Abbas abandoned the effort to seek statehood. The Palestinian leader refused.

The UN General Assembly

Abbas appealed to all nations to vote in favour of the Palestinians "as an investment in peace."

Malta was among the countries which backed the resolution, as did France and Spain, among other European countries. Germany and the UK abstained. Israel, the US and Canada were among those that voted against.

The Palestinians say they need UN recognition of a Palestinian state in the West Bank, Gaza and east Jerusalem, the lands Israel captured in 1967, to be able to resume negotiations with Israel. They say global recognition of the 1967 lines as the borders of Palestine is meant to salvage a peace deal, not sabotage it, as Israel claims.

The non-member observer state status could also open the way for possible war crimes charges against the Jewish state at the International Criminal Court.

"The resolution in the UN today won't change anything on the ground," Mr Netanyahu declared. "It won't advance the establishment of a Palestinian state, but rather, put it further off."

Mr Netanyahu's predecessors accepted the 1967 lines as a basis for border talks. Mr Netanyahu has rejected the idea, while pressing ahead with Jewish settlement building on war-won land, giving Mr Abbas little incentive to negotiate.

For Abbas, the UN bid is crucial if he wants to maintain his leadership and relevance, especially following the recent conflict between his Hamas rivals in Gaza and Israel. The conflict saw the Islamic militant group claim victory and raise its standing in the Arab world, while Mr Abbas' Fatah movement was sidelined and marginalised.

In a departure from previous opposition, the Hamas militant group, which rules the Gaza Strip, said it wouldn't interfere with the UN bid.

The US Congress has threatened financial sanctions if the Palestinians improve their status at the United Nations.

Unlike the Security Council, there are no vetoes in the General Assembly and the resolution to raise the Palestinian status from an observer to a non-member observer state only requires a majority vote for approval. To date, 132 countries - over two-thirds of the UN member states - have recognised the state of Palestine.