UNITED NATIONS (Reuters) ? Diplomats struggled to find a formula on Thursday to avoid a clash over the Middle East as time ticked down on Palestinian plans to ask the United Nations to recognize their statehood.
President Mahmoud Abbas is pushing ahead with plans to submit the Palestinian application to the U.N. Security Council on Friday, rebuffing a personal plea from U.S. President Barack Obama to forgo the U.N. option and resume direct peace talks with Israel.
Iranian President Mahmoud Ahmadinejad, who has called Israel a "tumor" to be wiped off the map, was due to address the U.N. General Assembly on Thursday.
Iran freed two Americans held for spying on Wednesday in what Ahmadinejad called a compassionate gesture before his U.N. address.
But Tehran is still regarded with deep suspicion by both Israel and Western powers, who fear it is moving ahead with a covert program to produce nuclear weapons which could radically alter the security calculus across the region.
Iran says the program is purely for peaceful purposes.
THE LIMITS OF INFLUENCE
Obama ended meetings with Abbas and Israeli Prime Minister Benjamin Netanyahu on Wednesday with no sign of progress on the Palestinian issue, highlighting the stark new limits of U.S. influence and his own personal clout.
He earlier told the United Nations that only negotiations can lead to a Palestinian state, and made no mention of a need for Israeli concessions, which could alienate Israel's powerful U.S. support base ahead of tough presidential election battle next year.
Obama has said the United States will veto any Palestinian move in the Security Council -- a step which would isolate Washington with its Israeli ally as Arab uprisings unleash unpredictable new political forces in the region.
Diplomats are now focused on several scenarios which they hope may contain the damage.
The Security Council could delay action on Abbas' request, giving the mediating "Quartet" -- the United States, Russia, the European Union and the United Nations -- more time to craft a declaration that could coax both sides back to the table.
But the Quartet may be unable to agree on a statement within the next two days that could satisfy both Israel and the Palestinians, which remain divided on core issues including borders, the status of Jerusalem, the fate of Palestinian refugees and the future of Jewish settlements.
ANOTHER ROUTE
Another option, advanced by French President Nicolas Sarkozy, would see the Palestinians skip the Security Council in favor of the General Assembly, which could vote to upgrade the Palestinians from an "entity" to a "non-member state" while reviving direct peace talks.
Sarkozy's plan calls for negotiations between Israel and the Palestinians to begin within one month, an agreement on borders and security within six months and a definitive peace agreement within a year.
The General Assembly route would require only a simple majority of the 193-nation body, not a two-thirds majority necessary for full statehood.
What remains unclear, however, is whether this formula would allow the Palestinians to bring the Israeli government or its officials before war-crimes tribunals or sue them in other global venues -- something Israel strongly opposes.
The Palestinians, for their part, have pledged to press ahead with the Security Council bid while keeping the General Assembly option open.
Whatever happens at the United Nations, Palestinians will remain under Israeli occupation and any nominal state would lack recognized borders or real independence and sovereignty.
The cash-strapped Palestinians face their own political divisions, and may also incur financial retribution from Israel and the United States which could hobble their efforts to build the framework of government for their new homeland.
In the West Bank, Palestinians have rallied this week to support the U.N. plan, with many expressing anger and disappointment over U.S. policy.
"Our alliance with America has not brought us anything," said Amina al-Akhras, a public sector employee, blaming reliance on international donor funds for what she described as lethargy among Palestinians living under Israeli occupation.
"We are ready to sacrifice their support and instead have a stronger national position," she said.
(Additional reporting by John Irish, Louis Charbonneau, Patrick Worsnip, Alistair Lyon and Tom Perry; editing by Mohammad Zargham)
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