Euphoric Palestinians erupted in cheers, honked car horns and chanted "God is great" after the United Nations endorsed an independent state of Palestine.
The vote gave sweeping international backing to their demands for sovereignty over lands Israel occupied in 1967.
The historic General Assembly decision to accept "Palestine" as a non-member observer state will not actually grant independence to the 4.3 million Palestinians who live in the West Bank, east Jerusalem and the Gaza Strip.
Israel remains an occupying force in the first two territories and continues to severely restrict access to Gaza, ruled by the Hamas militant group. Nor does the vote plaster over the rift in the Palestinian leadership that has led to the emergence of dueling governments in the West Bank and Gaza.
But by gaining approval at a world forum overwhelmingly sympathetic to their quest, Palestinians hope to make it harder for Israel to resist global pressure to negotiate the borders of a future Palestine based on lines Israel held before capturing the West Bank, east Jerusalem and Gaza in 1967.
Israeli Prime Minister Benjamin Netanyahu dismissed the UN vote as meaningless and accused Abbas of delivering a "defamatory and venomous" UN speech "full of mendacious propaganda" against Israel. Netanyahu argued that the UN move violated past agreements between Israel and the Palestinians and that Israel would act accordingly, without saying what steps it might take.
The massive international recognition of the Palestinians' right to a state - only nine of 193 General Assembly members voted against it - gave them hope that the tide had turned in their favour.
"It's a great feeling to have a state, even if in name only," said civil servant Mohammed Srour, 28, standing in a flag-waving a crowd of more than 2,000 packed into a square in the West Bank city of Ramallah.
"The most beautiful dream of any man is to have an independent state, particularly for us Palestinians who have lived under occupation for a long time."
Hamas, once shunned internationally for its campaign of violence against Israel, has seen its isolation ease in recent months, as Islamists gain power across the region. An outpouring of support from the Arab world during an Israeli offensive against targets linked to militants earlier this month in Gaza gave them another lift.
After initially criticising the UN bid as an empty gesture, Hamas has come around to supporting the popular move, with reservations.
Palestinians in the coastal strip also celebrated the vote, though on a smaller scale than after the massive eruption of joy in the streets after last week's ceasefire deal with Israel.
The Palestinians turned to the UN after two decades of on-again, off-again talks undermined by violence and a failure of will. They reject Israel's claim that the recognition bid is an attempt to dictate the future borders of Palestine.
Instead, they say, it's a last-ditch attempt to rescue peace efforts threatened by Israeli settlement building on occupied land. Since 1967, half a million Israelis have settled on lands the UN says are part of Palestine.
Mr Abbas's aides say that with its vote, the UN is rebuffing Israeli attempts to portray these territories as "disputed," or up for grabs, rather than occupied.
Abbas aide Nabil Shaath said it will no longer be up to Israel to decide whether the Palestinians can have a state.
"The notion that Israel should approve the Palestinians' inalienable right to self-determination is simply illogical, immoral, and totally unacceptable," he wrote in an opinion piece in the Israeli daily Haaretz.
The endorsement of the pre-1967 line as the border of Palestine also poses a direct challenge to Mr Netanyahu, who has refused to accept that demarcation as a basis for border talks with the Palestinians.
The Palestinians could also gain access to UN agencies and international bodies, most significantly the International Criminal Court, which could become a springboard for going after Israel for alleged war crimes or its ongoing settlement building on war-won land.
Most immediately, the Palestinian Authority, which relies heavily on foreign aid and is struggling with the worst cash crisis in its 18-year history, could face further funding cuts over the UN bid.
In Washington, a bipartisan group of senators warned the Palestinians they could lose US financial support of millions of dollars a year and risk the shutdown of their Washington office if they use their enhanced UN status against Israel
Israel could also suspend the monthly transfer of millions of dollars in tax rebates it collects on behalf of the Palestinians, a punitive step it has taken in the past.