The Palestinian bid for statehood is already dominating talks at the United Nations, as the General Assembly prepares to meet later this week.
Palestinian prime minister Salam Fayyad met Israel's Defense Minister Ehud Barak for talks over the country's bid for UN membership, but the Diplomatic Quartet on the Middle East is hoping to head off a potential showdown.
SBS Senior Correspendent Brian Thomson is in New York following developments, including a possible deal to give Palestinians greater recognition, while encouraging both sides to return to two-party talks.
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Palestine PM, Salam Fayyad, is still talking but refusing to buckle as he presses the case for recognition at the United Nations.
Meanwhile, Israel is applying pressure on sympathetic UN members to block the vote, putting many countries in a difficult position, which is why the UN's 'Diplomatic Quartet,' represented by Tony Blair, is working furiously behind the scenes to avoid a potentially explosive vote.
Mr Blair is hoping both sides will meet half way.
"Let's see if we can craft something that allows the Palestinians to come to the United Nations, to advance their aspirations for statehood, but also at the same time allows us to develop a framework for negotiations so that they get back to talking," Mr Blair said.
The Palestinian authority currently has observer status at the UN, and their application to the security council is for full membership.
It's a move that's doomed to fail, with the US vowing to veto it.
"We're going to stick by Israel and its security, but we need to give them the ability to bring the Palestinians back into a negotiated position," said former US President Bill Clinton
Israel had been threatening a harsh reponse if the Palestinians went ahead with the statehood bid, but just days before he is due to arrive at the UN the Israeli PM, Benjamin Netanyahu, is adopting a more conciliatory tone:
"We are prepared to enter negotiations for peace with our Palestinian neighbours if they are willing. I think that eventually, after the smoke clears, after all that is happening at the UN, at the end, the Palestinians will come to their senses - this is what I hope." If the bid for full membership at the Security Council fails, the Palestinians are then expected to apply to the General Assembly for permanent non member status. This move would force countries like Australia - not represented on the Security Council - to take a position.
As of yet Australia has still not decided how it will vote.
How do you feel about the Palestinian Authority's bid for statehood? Have your say here.
