Palestinian President Mahmoud Abbas asks the United Nations on Friday to recognize a state for his people, as Israel still occupies its territory and the United States has vowed to veto the demand.
Abbas will hand U.N. Secretary-General Ban Ki-moon an application for full U.N. membership, which the Security Council must then consider.
His appeal to the council reflects a loss of faith after 20 years of failed peace talks sponsored by the United States, Israel's main ally, and alarm at relentless Israeli settlement expansion eating into the land Palestinians want for a state.
"It is not a secret that the U.S. administration has done everything it could to prevent us from going (to the United Nations)," Abbas, 76, told reporters late on Thursday.
"But we're going without any hesitation and we will continue whatever the pressure ... because we are asking for our right, because we want our independent state," he added.
U.S. President Barack Obama had told the United Nations a year ago he hoped Palestinians would have a state by now.
But he said on Wednesday only Israeli-Palestinian negotiations, not actions at the United Nations, could bring peace.
Flags and portraits of the late Yasser Arafat and President Mahmoud Abbas draped buildings in a central Ramallah square where Palestinians awaited the live broadcast of a speech by Abbas.
"This is something we should have done a long time ago," said Khaled Shtayyeh, 42, carrying a Palestinian flag. "It was always stopped by international pressure. I am very proud. I hope there is no postponement."
Palestinians say they have been patient during 20 years of peace talks that have yielded nothing, while Israel's occupation continues and Jewish settlements grow on West Bank land.
"It's the first time for a long time, maybe since 1988, that the Palestinian leadership has taken matters into its hands. The occupation will continue and it might get worse but the initiative is in our hands," said Shtayyeh.
Abbas's U.N. initiative has thrust the long-running Middle East conflict back into the world spotlight after months of international apathy. But its outcome and its potential effects are far from clear.
"At the moment, it's a state on paper. We are still occupied," said Raymond Bosheh, 50, as he watched preparations outside his restaurant in the recently renamed Yasser Arafat Square.
"I am with the move, but the consequences scare me," he said, noting Palestinian dependence on American aid and Israeli-controlled access to trade.
"The economy could play a big role. Many people have nothing. We are living on aid. The economy is not based on anything solid. Everybody takes pride in the idea of having a state but how can you live in it when you have to pass through three checkpoints to get to Bethlehem?"
There were reports of attack by Israeli security forces in the West Bank, where tension has grown between Palestinian villagers and illegal settlers.
In the village of Qusra, south east of Nablus, settlers were vandalising olive trees.
Israeli security forces shot dead a Palestinian in the occupied West Bank.
Hany Abu Murad, the mayor of the village where the killing occurred, named the dead person as Essam Kamal Badran, 35.
The incident occurred in Qusra, southeast of the Palestinian city of Nablus.
"US, Israel economic threats"
Israeli and U.S. politicians have threatened financial reprisals that could cripple his Palestinian Authority.
Should that happen, Palestinian negotiator Saeb Erekat said, the PA could dissolve itself, forcing Israel to consider reassuming responsibility over all of the West Bank -- a major demographic and security liability for the Jewish state.
"We will invite you to become the only authority from the River Jordan to the Mediterranean," Erekat told Israel Radio.
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 the two sides back to the table.
But the Quartet, whose envoys met again on Friday, may be unable to agree immediately on a statement that could satisfy both Israel and the Palestinians.
Italian Foreign Minister Franco Frattini said the Quartet would await the speeches of Abbas and Netanyahu before setting out "some guidelines, key points and even some red lines."
"It's better to take one or two days more rather than accelerating and having a weak statement from the Quartet," he said.