UNITED NATIONS The United Nations voted overwhelmingly Thursday to recognize a Palestinian state, a long-sought victory for the Palestinians but an embarrassing diplomatic defeat for the United States.

The resolution upgrading the Palestinians' status to a nonmember observer state at the United Nations was approved by a more than two-thirds majority of the 193-member world body -- a vote of 138-9, with 41 abstentions. The Vatican is the only other entity in the U.N. that shares the same status.

A Palestinian flag was quickly unfurled on the floor of the General Assembly, behind the Palestinian delegation.

• Is Palestine now a state?

Real independence, however, remains an elusive dream until the Palestinians negotiate a peace deal with the Israelis, who warned that the General Assembly action will only delay a lasting solution. Israel still controls the West Bank, east Jerusalem and access to Gaza, and it accused the Palestinians of bypassing negotiations with the campaign to upgrade their U.N. status.

The United States immediately criticized the historic vote. "Today's unfortunate and counterproductive resolution places further obstacles in the path peace," U.N. Ambassador Susan Rice said. Secretary of State Hillary Clinton called the vote "unfortunate" and "counterproductive."

Israeli Prime Minister Benjamin Netanyahu called the speech by Palestinian President Mahmoud Abbas to the General Assembly shortly before the vote "defamatory and venomous," saying it was "full of mendacious propaganda" against Israel.

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Palestinians celebrate statehood recognition

Abbas had told the General Assembly that it was "being asked today to issue the birth certificate of Palestine," saying the vote is the last chance to save the two-state solution.

"The window of opportunity is narrowing and time is quickly running out. The rope of patience is shortening and hope is withering. The innocent lives that have been taken by Israeli bombs ... are a painful reminder to the world that this racist, colonial occupation is making the two-State solution and the prospect for realizing peace a very difficult choice, if not impossible," Abbas said ahead of the vote. He got a huge round of applause as he left the podium.

Israel's U.N. ambassador, Ron Prosor, warned the General Assembly that "the Palestinians are turning their backs on peace" and that the U.N. can't break the 4,000-year-old bond between the people of Israel and the land of Israel.

"For as long as President Abbas prefers symbolism over reality, as long as he prefers to travel to New York for U.N. resolutions, rather than travel to Jerusalem for genuine dialogue, any hope of peace will be out of reach," Prosor said.

People wave Palestinian flags during a rally supporting the Palestinian U.N. bid for observer state status, in the West bank city of Ramallah, Thursday, Nov. 29, 2012.

/ AP Photo/Majdi Mohammed

After the vote, Netanyahu said the U.N. move violated past agreements between Israel and the Palestinians and that Israel would act accordingly, without elaborating what steps it might take.

CBS News foreign affairs analyst Pamela Falk explains that many diplomats believe the Palestinian bid for non-member state status, despite U.S. and Israeli objections, could restart peace talks for several reasons: "The support for the bid of former Israeli prime minister Ehud Olmert; because there is agreement between the leadership of the West Bank and Gaza on the vote; and because the recent fighting has raised the stakes," she said.

But Israeli and the U.S. officials say that the vote is not at all productive toward peace talks. Netanyahu said the Palestinians will not win a state until they recognize Israel as the Jewish homeland, declare an end to their conflict with the Jewish state and agree to security arrangements that protect Israel.

The vote had been certain to succeed, with most of the member states sympathetic to the Palestinians. Several key countries, including France, this week announced they would support the move to elevate the Palestinians from the status of U.N. observer to nonmember observer state.

Thursday's vote came on the same day, Nov. 29, that the U.N. General Assembly in 1947 voted to recognize a state in Palestine, with the jubilant revelers then Jews. The Palestinians rejected that partition plan, and decades of tension and violence have followed.

The vote grants Abbas an overwhelming international endorsement for his key position: establishment of a Palestinian state in the West Bank, Gaza Strip and east Jerusalem, the territories captured by Israel in the 1967 Mideast war. With Netanyahu opposed to a pullback to the 1967 lines, this should strengthen Abbas' hand if peace talks resume.

The overwhelming vote also could help Abbas restore some of his standing, which has been eroded by years of standstill in peace efforts. His rival, Hamas, deeply entrenched in Gaza, has seen its popularity rise after an Israeli offensive on targets linked to the Islamic militant group there earlier this month.

Israel has stepped back from initial threats of harsh retaliation for the Palestinians seeking U.N. recognition, but government officials warned that Israel would respond to any Palestinian attempts to use the upgraded status to confront Israel in international bodies.

The Palestinians now can gain access to U.N. agencies and international bodies, most significantly the International Criminal Court, which could become a springboard for going after Israel for alleged war crimes or its ongoing settlement building on war-won land.

However, in the run-up to the U.N. vote, Abbas signaled that he wants recognition to give him leverage in future talks with Israel, and not as a tool for confronting or delegitimizing Israel, as Israeli leaders have alleged.