UNITED NATIONS (Reuters) - President Mahmoud Abbas told the United Nations' top official on Monday he would seek full U.N. membership for a Palestinian state, a move the United States and Israel warn could lead to disaster and shatter chances for resuming peace negotiations.
Abbas told U.N. Secretary-General Ban Ki-moon he would press ahead with plans to ask on Friday for a Security Council vote on Palestinian membership. Washington has threatened to veto any such move.
Ban told Abbas he would perform his duties for any application submitted, and called for the Israelis and the Palestinians to resume talks "within a legitimate and balanced framework," U.N. spokesman Martin Nesirky said.
The Palestinian crisis has overshadowed this week's meeting of the U.N. General Assembly and sparked hectic last-minute talks aimed at averting a confrontation which carries risks for the Palestinians, Israel and the United States.
Abbas, speaking to reporters on his plane en route to New York, acknowledged it could have repercussions for his Palestinian Authority, the fragile government-in-waiting which depends on international financial aid for its survival in the Israeli-occupied West Bank.
"We decided to take this step and all hell has broken out against us," he said, adding that he would not be swayed.
"From now until I give the speech, we have only one choice: going to the Security Council. Afterwards, we will sit and decide," he said.
The administration of U.S. President Barack Obama, who had sought to use the "Arab Spring" uprisings to recast U.S. ties with the Arab world, has vowed to veto a statehood resolution. It says only a resumption of a two-decade-old negotiation process can bring lasting peace between the two sides.
Some U.S. lawmakers say they will try to cut the some $500 million in U.S. aid per year to the Palestinians if they refuse to back down.
The Palestinian Authority's central bank chief, Jihad al-Wazir, warned that this could spell the end of the Palestinians' current efforts at self-government.
"Really, the risk of PA collapse is very real under the financial strain," he told Reuters.
With virtually no hope of success in the Security Council, the Palestinians could also ask the U.N. General Assembly to upgrade their standing from an "entity" to "a non-member state" -- a move they believe is likely to pass with support from at least 126 members of the 193-member body.
Abbas was also due to meet on Monday with French Foreign Minister Alain Juppe, who warned that both Israel and the Palestinians were courting disaster.
"The only solution is to resume talks," Juppe said in remarks at the Council on Foreign Relations in New York.
British Foreign Secretary William Hague, who was due to meet Abbas on Tuesday, said the Palestinians had no hope of winning approval on the Security Council in a vote that could leave members of the European Union on opposing sides.
"It's not clear how many of the members of the Security Council would support it but it would leave no one any further forward," Hague said, adding that all sides were pressing for talks "to allow a Palestinian state truly to come into being."
A U.S. Security Council veto would carry diplomatic risks for Washington, which could find itself isolated alongside its longtime ally Israel during a period of unprecedented political turmoil across the Middle East.
It would also likely boost tensions between the Palestinians and Israeli Prime Minister Benjamin Netanyahu's government, which has already seen traditionally steady ties with key neighbors Egypt and Turkey deteriorate quickly.
Senior diplomats from the United States, Russia, the European Union and the United Nations -- the so-called Quartet of Middle East mediators -- were expected to meet throughout the week in hopes of finding a way forward.
The Quartet has for months been trying to put together guidelines for future peace talks, but Abbas has said they have offered nothing new.
The last round of the U.S.-backed talks between Abbas and Netanyahu collapsed nearly a year ago. The Palestinians pulled out after Israel declined to extend a partial moratorium on settlement building in the West Bank on land occupied in the 1967 war which the Palestinians want for their state.
Apart from borders, key points of contention include the status of Jerusalem, the future of Palestinian refugees and whether Israel should be acknowledged as a Jewish state.
The Palestinians say they will not resume talks unless the moratorium is reinstated. Israel says talks should resume without preconditions but that it accepts the idea that the Palestinians should ultimately have their own state.
(Additional reporting by John Irish and Daniel Bases; writing by Andrew Quinn; editing by Mohammad Zargham)