But the diplomatic drive by President Mahmoud Abbas received support from Russia and Arab countries at a UN Security Council debate on the Middle East situation.
Having failed last year to win recognition of full statehood at the United Nations, Abbas said last month he would seek a less-ambitious status upgrade at the world body to make it a "non-member state" like the Vatican.
The president of the 193-member UN General Assembly, Vuk Jeremic, has said the issue will likely be debated in mid-November, after the US elections. Washington argues a Palestinian state can only be created through direct talks.
"Unilateral actions, including initiatives to grant Palestinians non-member state observer status at the United Nations, would only jeopardize the peace process and complicate efforts to return the parties to direct negotiations," the US ambassador to the United Nations, Susan Rice, told the Security Council.
There have been no direct Palestinian talks with Israel on peace since 2010, when the Palestinians refused to resume negotiations unless the Israeli government suspended settlement building in occupied West Bank and East Jerusalem.
"Any efforts to use international fora to prejudge final status issues that can only be resolved directly by the parties will neither improve the daily lives of Palestinians nor foster the trust essential to make progress towards a two state solution," Rice said.
The Palestinians' current UN status is an "observer entity." If Abbas wins, that would change to "observer state."Joining international bodies
Being registered as a state rather than an entity would mean the Palestinians could join bodies such as the International Criminal Court and file complaints against Israel for its continued occupation of land it seized in the 1967 war.
Egypt's UN Ambassador Mootaz Ahmadein Khalil, speaking to the council on behalf of the Arab group of countries, said it fully supported the Palestinians bid.
"We expect the General Assembly to adopt a resolution during its current session to upgrade the status of Palestine to become a 'non-member observer state,' as a first step towards reaching full membership," he said.
Russia's UN Ambassador Vitaly Churkin said: "We believe that the initiative to gain broad international recognition for Palestinian statehood ... complements efforts to achieve a negotiated solution to the conflict with Israel rather than serve as an alternative."
"In no case should they be used by Israel to tighten the screws in the occupied territories or exert any other pressure on the Palestinian Authority," he said.
The Palestinians won admission to the United Nations Educational, Scientific and Cultural Organization in October last year, a move that prompted the United States to cut off funding to the UN agency.
A 1990s US law prohibits US funding to any UN organization that grants full membership to any group that does not have "internationally recognized attributes" of statehood.
The law could also prohibit American funding for any other U.N. organization that grants Palestinians full membership status, such as the International Atomic Energy Agency, which among other things monitors Iran's nuclear program.
UN Secretary-General Ban Ki-moon said last month that the two-state solution was the only sustainable option for peace. But he said the continued growth of Israeli settlements meant that "the door may be closing, for good."
The so-called two-state solution involves the creation of a state of Palestine to exist peacefully alongside Israel.
UNITED NATIONS (Reuters) - A Palestinian bid to upgrade its UN status to a sovereign country would jeopardize the peace process with Israel and make it difficult to get the two sides to return to talks on a two-state solution, the United States said on Monday.