The UN General Assembly
has voted overwhelmingly to recognise Palestine as a non-member observer
state - a move strongly opposed by Israel and the US.
Palestinian President Mahmoud Abbas said this was the "last chance to save the two-state solution" with Israel.
Israel's envoy to the UN said the bid pushed peace process "backwards", while the US said the move was "unfortunate".
The Palestinians can now take part in UN debates and potentially join bodies like the International Criminal Court.
The assembly voted 138-9 in favour, with 41 nations abstaining.
Hundreds of Palestinians celebrated on the streets of Ramallah, in the West Bank after the result was announced.
The parties began in Yasser Arafat Square on Thursday morning - long before the voting.
Mr Abbas made his speech in New York just before 23:00 local
time as crowds of people waving flags gathered around large screens
carrying the live feed.
Fireworks erupted in Ramallah with the news of the vote.
While Palestinians will see no changes on the ground with immediate
effect, the symbolism is all-important.
There is also hope that access to UN bodies will bring new
rights. A successful application for membership of the International
Criminal Court could be used to accuse Israel of war crimes or make
other legal claims against it.
"Sixty-five years ago on this
day, the United Nations General Assembly adopted resolution 181, which
partitioned the land of historic Palestine into two states and became
the birth certificate for Israel," Mr Abbas said shortly before the vote
in New York.
"The General Assembly is called upon today to issue a birth certificate of the reality of the State of Palestine," he said.
But Israel's Prime Minister Benjamin Netanyahu called the
vote "meaningless", and said that Mr Abbas' address in New York had not
been "the words of a man who wants peace".
Opponents of the bid say a Palestinian state should emerge
only out of bilateral negotiations, as set out in the 1993 Oslo peace
accords under which the Palestinian Authority was established.
US Secretary of State Hillary Clinton called the vote
"unfortunate and counter-productive", saying it put more obstacles on
the path to peace.
UN Secretary General Ban Ki-moon also called for more talks,
saying the resolution underscored the need to resume meaningful peace
negotiations.
The BBC's Aleem Maqbool said there were celebrations in the West Bank and Gaza Strip
The UK abstained from the vote, as did Germany. The Czech
Republic, Canada, the Marshall Islands and Panama were among the nations
voting with the US and Israel.
In the West Bank, crowds celebrated the vote by waving flags and chanting "God is great!"
"For the first time, there will be a state called Palestine,
with the recognition of the entire world," Amir Hamdan was quoted as
saying by the Associated Press news agency.
"Today the world will hear our voice," he added.
Symbolic milestone
The Palestinians are seeking UN recognition of a Palestinian
state in the West Bank, Gaza and East Jerusalem, the lands Israel
captured in 1967.
While the move is seen as a symbolic milestone in Palestinian
ambitions for statehood, the "Yes" vote will also have a practical
diplomatic effect, says the BBC's Barbara Plett, at the UN.
Israel's ambassador to the UN, Ron Prosor, says the only way to achieve peace is through negotiation
The Palestinians hope that access to UN bodies will bring new
rights: A successful application for membership of the ICC could be used
to accuse Israel of war crimes or make other legal claims against it.
"This is a whole new ball-game now. Israel will be dealing
with a member of the international community, a state called Palestine
with rights," senior PLO official Hanan Ashrawi told the BBC.
"We will have access to international organisations and agencies and we will take it from there."
There had been lobbying by Israel and the US to try to delay
the vote or change the text to obtain guarantees that no international
legal action would be taken against Israel.
Last year, Mr Abbas asked the UN Security Council to admit the Palestinians as a member state, but that was opposed by the US.
How did key countries vote?
- Voted for: France, Spain, Belgium, Norway, Switzerland,
Austria, Denmark, Turkey, China, Russia, India, Brazil, South Africa,
Nigeria
- Voted against: Israel, US, Canada
- Abstained: UK, Germany, Australia, Colombia
Mr Abbas was much criticised by
many Palestinians for remaining on the sidelines of the conflict earlier
this month in Gaza and efforts to achieve a ceasefire with Israel.
His Fatah movement, based in the West Bank, is deeply split from the militant Hamas movement which governs Gaza.
Gaza's Prime Minister Ismael Haniyeh said in a statement sent
to the BBC that Hamas' "support for the UN bid is based on the 'rule of
non-recognition of the occupier'... and the right of Palestinians to
return to their homeland". (BBC)