Relatives of Palestinian Matter Abu al-Atta, who was killed in Israeli shelling on Saturday, mourn during his funeral in Gaza City Nov. 11, 2012. The Palestinian leadership is moving ahead with a bid to upgrade the Palestinians’ status at the United Nations to non-member statehood. (Ibrahee Mabu Mustafa/Reuters)

Defying strong pressure from Washington, the Palestinian leadership is moving ahead with a bid to upgrade the Palestinians’ status at the United Nations to non-member statehood, with a draft resolution on the issue expected to be presented Nov. 29.

The Palestinian Authority risks a punitive freeze of funds transferred by Israel and the United States, which oppose the U.N. move, but Palestinian officials say they will take the step regardless of possible retaliatory measures, hoping to get Arab nations to provide a financial safety net.

“The train has left the station,” Mohammad Shtayyeh, a senior aide to Palestinian Authority President Mahmoud Abbas, told reporters Monday. “This is a point of no return from our side.”

Palestinian officials circulated a draft resolution to U.N. member states last week that called for upgrading the Palestinians’ status in the world body from “observer entity” to non-member “observer state,” similar to the status given to the Vatican.

As a U.N. observer state, Palestine could join bodies such as the International Criminal Court, where it could bring cases against Israel and ask the court to investigate alleged war crimes committed on Palestinian territory.

Shtayyeh said the resolution refers to a Palestinian state in the West Bank, Gaza Strip and East Jerusalem, with the final borders to be delineated in negotiations. He said consultations were underway with U.N. member states on a final draft to be presented to the 193-member General Assembly, where a majority is expected to favor the resolution.

An attempt by the Palestinians to gain full U.N. membership failed last year after they were unable to muster the required votes in the Security Council. The move drew strong opposition from Washington, which threatened to veto the bid. Resolutions cannot be vetoed in the General Assembly.

The United States and Israel say the Palestinian statehood bid undermines peace efforts because it is a unilateral step to decide an issue that should be resolved through negotiations.

In a telephone conversation Sunday, Abbas rebuffed an appeal from President Obama to forgo the U.N. initiative. The White House said the president reiterated his “opposition to unilateral efforts at the United Nations” and his support for “direct negotiations between Israel and the Palestinians.”

Palestinian officials argue that the U.N. bid is an attempt to enlist international backing for Palestinian statehood after a prolonged deadlock in peace efforts, during which the Obama administration effectively withdrew from mediating a deal.

“We are going to the United Nations to preserve the two-state solution,” Shtayyeh said, adding that adoption of the resolution would create “new terms of reference for any future negotiations.”

He noted that Israel was established on the basis of a U.N. vote in 1947 that called for the partition of Palestine, then under British administration, into a Jewish and Arab state. That vote was taken Nov. 29, the same day chosen by Palestinians to submit their bid. The date is also marked annually at the United Nations as the International Day of Solidarity with the Palestinian People.

Abbas said Monday that the Palestinians were prepared to resume negotiations with Israel after the U.N. vote. Those talks collapsed two years ago over continued Israeli settlement building in the West Bank and East Jerusalem, and the Palestinians still insist on a settlement freeze before negotiations can resume.

Israeli Prime Minister Benjamin Netanyahu has called for a resumption of talks without preconditions.

Mark Regev, a spokesman for Netanyahu, said that by going to the United Nations, the Palestinians were violating a commitment they had given before the signing of the 1993 Oslo accords to resolve the conflict with Israel through negotiations. “The truth is that their move will not bring a Palestinian state any closer,” Regev said. “The only way to bring about a Palestinian state is through negotiations and a peace arrangement with Israel.”

Regev said Israel “reserves the right to respond” to the Palestinian move, but he declined to elaborate.

Israeli Finance Minister Yuval Steinitz has threatened to halt the transfer of about $100 million a month in tax revenue and customs duties that Israel collects for the Palestinian Authority. The money forms a major part of the domestic revenue of the cash-strapped Palestinian government, which has been struggling to pay the salaries of its employees.

Israel took a similar step last year after the Palestinians gained state membership in the U.N. cultural agency UNESCO but reinstated the tax transfers several weeks later under strong international pressure.

Shtayyeh called the Israeli warnings “empty threats.” He said Israel did not want to see the collapse of the Palestinian Authority, with which it has strong security cooperation and which provides government services formerly provided by the Israeli military.

“Israel has a vested interest in maintaining the status of the Palestinian Authority as it stands today, and I don’t think that the Israelis are in a position to push this Palestinian Authority to a total collapse,” Shtayyeh said.

The Palestinians say they are still waiting for the transfer of about $200 million in U.S. aid released by Obama in April after Congress froze the funding in response to the Palestinians’ initial U.N. statehood bid in September 2011.

Saeb Erekat, the chief Palestinian negotiator, told Voice of Palestine radio that efforts were underway to activate a pledge by the Arab League to provide $100 million monthly to help make up for the possible aid shortfall.

After meeting in Cairo on Monday with Arab League Secretary General Nabil Elaraby, Abbas sounded a conciliatory note. “We don’t want any confrontations with the United States or Israel,” he said. “If we could start a dialogue or negotiations the day after the vote, we will.”