President Mahmoud Abbas said on Friday he would demand full membership of the United Nations for a Palestinian state when he goes to the UN General Assembly next week, setting up a diplomatic clash with Israel and the United States.

"We are going to the United Nations to request our legitimate right, obtaining full membership for Palestine in this organization," Abbas said in a televised speech.

"We are going to the Security Council," he added, to rapturous applause from his audience of Palestinian leaders in Ramallah, signaling his determination to press ahead despite efforts by U.S. and European officials to dissuade him.

Both Israel and its main ally, the United States, firmly oppose the initiative, arguing that a Palestinian state can only be created through direct negotiations.

The Palestinians say almost 20 years of on-off direct talks on statehood envisaged by interim peace accords have hit a dead end for reasons including Israel's refusal to stop expanding settlements in the West Bank and East Jerusalem, lands it took in the 1967 Arab-Israeli war and which Palestinians want, along with the Gaza Strip, for an independent state.

The last round of the U.S.-backed talks between Abbas and Israeli Prime Minister Benjamin Netanyahu collapsed nearly a year ago when the Jewish state declined to extend a partial moratorium on West Bank settlement building.

A full halt to such construction on territory the Palestinians say they need for a viable state is one condition they have set for a resumption of negotiations. Israel withdrew settlers from tiny, coastal Gaza in 2005.

Abbas said the U.N. step would not "end the occupation," but would strengthen the Palestinians' hand.

Washington has said it will veto any statehood resolution in the Security Council. Some U.S. politicians have said they will try to cut American aid to the Palestinians, totaling some $500 million a year, if they refuse to back down.

A statement from Netanyahu's office issued after the speech said the Palestinians were "systematically" avoiding direct talks with Israel.

Abbas said recognition as a state would allow a return to peace talks, but on a stronger footing. "Negotiations, no matter how difficult, will be between one state and another."

State Department spokesman Mark Toner said the United States remained committed to getting the two sides back to the negotiating table.

"What we are focused on is ... getting them back to the table so that they can address the many final status issues and reach a comprehensive peace agreement that results in two states living side by side," Toner said.

A flurry of diplomacy led predominantly by the European Union has sought to avert the U.N. showdown by seeking a deal that would bring about a return to talks within weeks, diplomats say.

However, the mediation is struggling in the face of long-standing disagreements over the terms of reference.

HAMAS SAYS ANY RESULT 'COSMETIC'

Failing that, the EU has also been trying to avoid a Security Council confrontation by persuading the Palestinians to accept a diluted upgrade to their status at the United Nations, where they are currently recognized as an "entity."

If Washington does veto the resolution, as expected, the Palestinians could then go to the full U.N. General Assembly. It does not have the power to grant them full membership, but could recognize Palestine as a non-member state.

Such a move would give the Palestinians possible access to other international bodies, including the International Criminal Court, from where it could seek to sue Israel over its longtime occupation of the West Bank.

Abbas said there was no decision on alternative options the Palestinians could pursue in the event of failure.

"If we succeed, and this is what we are working toward, then we must know that the day following the recognition of the state, the occupation will not end," Abbas said.

"But we will have obtained the world's recognition that our state is occupied and that our land is occupied and not disputed territory, as the Israeli government claims," he said.

Abbas' Islamist rivals in the Hamas movement, which governs Gaza, dismissed the plan. A spokesman said any result would be "cosmetic, especially when Mahmoud Abbas said his aim is to return to the negotiations with the occupation after all."

The Arab League on Tuesday threw its support behind Abbas's initiative. Arab foreign ministers, who began efforts in July to organise backing for the Palestinian bid, decided to set up a team comprising the League head and six League members to further pursue the controversial statehood application.

Long criticized at home for appearing weak in the face foreign pressure, Abbas signaled no retreat from his plan.

"You certainly don't believe me," he joked during the speech, adding that he would present the application after delivering his speech to the General Assembly on September 23 -- when Netanyahu is also addressing the gathering.

He also stressed that any popular protests in support of his initiative should be peaceful. Israel fears that the U.N. showdown could spark violence across the West Bank and is putting its forces on high alert in the area.

A French government official warned of a race against time. "What (Europeans) would like is the relaunch of peace talks. Our feeling is that time is running out for peace and even more so with the Arab Spring," he said, alluding to popular revolutions in several Arab countries this year.

"These states will be democratic countries that will have to consider public opinion even more ... Today we still have a window of opportunity for peace but the feeling is that if these renewed peace talks don't happen then the Palestinian territories, which are fairly calm (now), could explode."