Members of the Palestinian community in Chile hold up a Palestine flag in Santiago during a protest against Israel
's military operations in Gaza.
The UN General Assembly has voted to effectively recognise Palestine as a sovereign state, to the dismay of the US and its ally Israel.
A total of 138 nations voted to upgrade Palestine's status from observer entity to observer state, with just nine voting against, including the delegations from Washington and the United States. However as many as 41 nations abstained from the voting including Britain, Australia and Germany.
The decision is seen as a victory for Palestine President Mahmoud Abbas, who urged the Assembly to "issue a birth certificate" for Palestine ahead of the vote.
Abbas said: "We did not come here seeking to delegitimize a State established years ago, and that is Israel; rather we came to affirm the legitimacy of the State that must now achieve its independence, and that is Palestine, "
Although Abbas's speech received a standing ovation at the UN, it was greeted with condemnation from Israeli Prime Minister Benjamin Netanyahu, who said his Palestinian counterpart's remarks were "hostile and poisonous" and "full of false propaganda."
"These are not the words of a man who wants peace," said a statement from Netanyahu's office.
'Prospects of peace have receded'
The US echoed Israel's sentiments, saying that the vote could diminish the prospects of peace between Israel and Palestinian. US Secretary of State Hillary Clinton called the UN's decision "unfortunate and unproductive."
Susan Rice, the US ambassador to the United Nations, added: "Today's grand pronouncements will soon fade. And the Palestinian people will wake up tomorrow and find that little about their lives has changed, save that the prospects of a durable peace have only receded,"
The resolution "does not establish that Palestine is a state," she said.
Meanwhile, scores of Palestinians in the West Bank and Gaza Strip celebrated the victory by setting off fireworks.
The Vatican also welcomed the vote and urged the international body to grant special status for Jerusalem, which is likely to annoy Israel.
Though the observer state status is a major milestone for Palestinians towards their ambition of achieving statehood, it will not give them any practical diplomatic effects such as membership in different UN bodies and agencies.
At present Palestine would not be able to file complaints at the International Criminal Court (ICC) against Israel for human rights violations as it is not yet a member of the ICC. However, the new status will increase its chances of joining ICC and other UN agencies in future.
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