Symbolising the change in course that emerged after an October Arab League meeting in Libya, president Mahmud Abbas laid on Friday the foundation stone for a Palestinian embassy in Brazil, the first of several Latin American states that recognised Palestinian statehood this month within the borders of 1967.

Those were the boundaries that existed before Israel captured the West Bank, including east Jerusalem, and the Gaza Strip in that year's Middle East war.

Argentina, Bolivia and Ecuador have since followed Brazil, and Uruguay has said it will do likewise early in 2011.

Direct talks between Israel and the Palestinians, the first for nearly two years, began on September 2 but stalled after a 10-month Israeli settlement-building freeze expired three weeks later and Prime Minister Benjamin Netanyahu refused to renew it.

Since then, Abbas has been floating possible alternatives ranging from a diplomatic offensive to radical options such as suspending interim agreements with Israel or even dissolving the self-rule Palestinian Authority.

Dismantling the Authority would potentially force Israel to take over the economic and political cost of governing the nearly 2.5 million Palestinians in the West Bank and formally bury the peace process launched with the 1993 Oslo accords.

In a recorded address broadcast on Palestinian television on Friday night Abbas called for the international community, spearheaded by the peacemaking Quartet the United Nations, the United States, Russia and the European Union, to come up with a new peace plan.

"We demand that the Middle East Quartet and the various UN bodies, headed by the Security Council, draft a peace plan which conforms with international law, instead of keeping up negotiations which do not solve the problem," he said, without elaborating.

The Palestinians' strategy centres on a proclamation of statehood in September 2011, the end of the 12 months set as a target for the talks launched in Washington.

It also marks the completion of prime minister Salam Fayyad's two-year plan for setting up the basic institutions of a state and it is when the United Nations holds its next General Assembly.

At the last session, Obama held out the prospect of Palestinian statehood by the time the UN convened again.

"When we come back here next year, we can have an agreement that will lead to a new member of the United Nations -- an independent, sovereign state of Palestine, living in peace with Israel," Obama said.

In November, Abbas said the president's words amounted to a pledge to support statehood.

"We consider this statement to be a commitment by President Obama, not just a slogan, and we hope that next year he won't say to us 'we apologise, we can't,'" Abbas said.

In the face of US opposition to a unilateral declaration, Palestinian diplomats are lobbying for broad recognition of a state within 1967 borders, recognised by the global community as Israeli-occupied Palestinian territories.

As and when such support reaches critical mass, they hope to go to the UN Security Council and request full UN membership, Palestinian foreign minister Riyad al-Maliki said in a recent interview with Voice of Palestine radio.

"The efforts now under way to get (individual) states to recognise statehood are in preparation for turning to the UNSC," he said.

Should the Security Council gambit fail due to a veto by one of the permanent members -- the United States, Russia, France, China and Britain -- Palestinians argue that they could use a rule applied in the past that allows in such a case for the same request to be put to the General Assembly.

A draft resolution by the Palestinians and Arab states calling for Israel to halt all settlement activities due to go before the Security Council would show whether the United States is willing to use its veto in support of Israel, as it has often done in the past.

Israel is concerned over the Palestinian strategy and has reportedly ordered its own diplomats worldwide to mount a counter-offensive.

If the Palestinians lose this battle, they are considering calling for their territories to be placed under international administration.

That could be along the lines of the multinational effort in Kosovo or perhaps reviving the UN Trusteeship Council that was set up to steer "non self-governing territories" towards autonomy and independence but suspended in 1994.

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