Palestinian president Mahmoud Abbas received a standing ovation at the United Nations this evening after he submitted a bid for recognition for a Palestinian state.
Mr Abbas handed UN secretary-general Ban Ki-moon a letter requesting full UN membership, which the Security Council must consider - although this may take some time.
"We extend our hands to the Israeli government and the Israeli people for peacemaking," Abbas said in a speech setting out his case to the UN General Assembly, which greeted him with a standing ovation.
In an address to the assembly, Mr Abbas said he was no longer willing to enter into "futile" negotiations without "clear parameters."
His appeal to the council reflects a loss of faith after 20 years of failed peace talks sponsored by the United States, Israel's main ally, and alarm at relentless Israeli settlement expansion eating into the land Palestinians want for a state.
It also exposes Washington's dwindling influence in a region shaken by Arab uprisings and shifting alliances that have pushed Israel, for all its military muscle, deeper into isolation.
"Our people will continue their popular, peaceful resistance," Mr Abbas declared. "This (Israeli settlement) policy will destroy the chances of achieving a two-state solution and ... threatens to undermine the structure of the Palestinian National Authority and even end its existence."
It was the first time Mr Abbas has spoken so starkly of the prospect of the PA's demise, highlighting the predicament faced by a body set up as a state-in-waiting but now seen by its critics as a big municipality, managing the civilian affairs of the main Palestinian cities under Israeli occupation.
Secretary general Ban Ki-moon forwarded the Palestinian application to the security council for consideration, a UN spokesman said.
The security council is expected to take some time to consider the Palestinian application, which the United States has promised to veto should it be brought to a vote.
Israeli prime minister Benjamin Netanyahu speaking after Mr Abbas had completed his address, told the assembly that only direct negotiations between the two sides can lead to a Palestinian state.
"I extend my hand to the Palestinian people," he said.
"The truth is that Israel wants peace, the truth is that I want peace," he said, adding that "we cannot achieve peace through UN resolutions."
"The Palestinians should first make peace with Israel and then get their state," he said.
Mr Netanyahu added that if there was such a peace, "Israel will not be the last state to welcome a Palestinian state into the United Nations. We will be the first."
It was also time for the Palestinians to acknowledge that "Israel is the Jewish state," he told the assembly. He also made an appeal to Mr Abbas for direct peace talks with the Palestinians to begin without delay in New York.
"Let's meet here today in the United Nations," he said.
US president Barack Obama, who told the United Nations a year ago he hoped Palestinians would have a state by now, said on Wednesday he shared frustration at the lack of progress.
But he said only Israeli-Palestinian negotiations, not actions at the United Nations, could bring peace - despite a long history of fruitless peace talks.
Mr Abbas is resorting to the United Nations even though Israeli and US politicians have threatened financial reprisals that could cripple the PA, which employs 150,000 people.
Palestinian negotiator Saeb Erekat said the PA could dissolve itself, throwing responsibility for ruling the whole of the West Bank back to Israel as the occupying power.
"We will invite you to become the only authority from the River Jordan to the Mediterranean," he told Israel Radio.
In the West Bank, Palestinians expressed a mix of pride and wary anticipation ahead of their UN claim to statehood.
Flags and portraits of Mr Abbas and his predecessor, the late Yasser Arafat, draped buildings in a central Ramallah square where Palestinians awaited a live broadcast of Abbas' speech.
"This is something we should have done a long time ago," said Khaled Shtayyeh (42) carrying a Palestinian flag. "It was always stopped by international pressure. I am very proud.
A gulf of mistrust separates Israelis and Palestinians, who each feel their existence is at stake in a bitter struggle over borders, security, refugees and Jerusalem.
Political rifts among Palestinians, and the constraints of US domestic politics, where support for Israel is strong, further complicate efforts to bridge the gaps.
Hamas rejected Mr Abbas' statehood bid as unworthy.
"Our Palestinian people do not beg for a state," said Ismail Haniyeh, who heads the Hamas administration in Gaza.
"States are not built upon UN resolutions. States liberate their land and establish their entities.
Diplomats are trying to limit the fallout from the Palestinian statehood application.
The security council could delay action on Abbas' request, giving the mediating "Quartet" - the United States, Russia, the European Union and the United Nations - more time to craft a declaration that could coax the two sides back to the table.
But the Quartet, whose envoys met again today, has spent months trying to agree on a statement acceptable to the parties.
Italian foreign minister Franco Frattini said the Quartet would await the speeches of Abbas and Netanyahu before setting out "some guidelines, key points and even some red lines."
"It's better to take one or two days more, rather than accelerating and having a weak statement," he said.
French president Nicolas Sarkozy has proposed that the general assembly vote to upgrade the Palestinians to a "non-member state," while reviving direct peace talks.
Israel rebuffed the idea. "A Palestinian state should be the outcome of negotiations, which means a Palestinian state should mark the end of conflict and cessation of claims," Mr Netanyahu's cabinet secretary, Zvi Hauser, told Israel's Army Radio.
Reuters