The United Nations has voted overwhelmingly to recognize a Palestinian state.

The vote, which was taken at a meeting of the body in New York on Thursday, represents a long-sought victory for the Palestinians but a diplomatic defeat for the U.S., with 138 countries voting in favor of the upgrade.

Nine countries voted against it and 41 others abstained.

A Palestinian flag was quickly unfurled on the floor of the General Assembly, behind the Palestinian delegation.

The new status is an indirect recognition of the Palestinians’ claims on statehood in the West Bank, East Jerusalem and Gaza Strip. It allows them to join a number of UN agencies, as well as the International Criminal Court (ICC).

Immediately after the results were announced, U.S. ambassador to the United Nations Susan Rice reiterated the U.S. opposition to upgrading the Palestinians to a nonmember an observer “entity.”

“Today’s unfortunate and counter-productive resolution places further obstacles in the path to peace. That is why the United States voted against it,” she said.

“The backers of today’s resolution say they seek functioning, independent Palestinian state at peace with Israel so do we. But we have long been clear that the only way to establish such a Palestinian state and resolve all permanent status issues is through the crucial if painful work of direct negotiations between the parties.”

The U.S. and Israel voted against recognition, joined by Canada, the Czech Republic, Marshall Islands, Micronesia, Nauru, Palau and Panama.

In the days preceding the vote, many key member states—including Spain, Russia, France, Switzerland and Denmark— voiced their support for the statehood believing that the enhanced status will bring a peaceful resolution to the on-going conflict with Israel.

Forty one countries abstained from the vote. After initial opposition, Germany flipped to abstention citing fears that the resolution could be counterproductive to the peace process. The Associated Press reports that the “decision to abstain rather than to vote against is a blow to Israel, which counts on Germany as a firm ally.”

The UK opted to abstain, as well, having waited until the eleventh hour to commit their vote.

“Long after the votes have been cast, long after the speeches have been forgotten, it is the Palestinians and the Israelis who must still talk to each other and listen to each other,” Rice said.

Meanwhile, UN Secretary General Ban Ki-moon renewed his call for the resumption of direct negotiations between Israel and Palestine.  

“Today’s vote underscores the urgency of the resumption of meaningful negotiations,” Ban said. 

“My position has been consistent all along. I believe that the Palestinians have a legitimate right to their own independent state. I believe that Israel has the right to live in peace and security with its neighbors. There is no substitute for negotiations to that end.”

As the votes were cast, there was silence among the thousands gathered in the West Bank city of Ramallah, which erupted with cheers of joy and chants of “God is greatest” when approval was announced.

Palestinians take part in a rally while the speech of Palestinian President Mahmoud Abbas is being projected in the West Bank city of Ramallah November 29, 2012. REUTERS

“I’m happy they declared the state even though it’s only a moral victory. There are a lot of sharks out there, but it feels good,” 39-year-old Rashid al-Kor told AFP.

Nearby, Palestinian-American Laila Jaman was waving a handful of Palestinian flags and carrying a picture of U.S. President Barack Obama and Palestinian president Mahmud Abbas.

“I feel so good, I cannot describe my feelings, it’s as if we reached the end of a dark tunnel. With a Palestinian state we are now united as a people and a leadership,” she said breathlessly.

There were celebrations in cities across the West Bank, as well as in Gaza, where the Hamas government offered tepid support for the bid and allowed backers to express their solidarity with the move.

In Bethlehem, fireworks were shot into the night sky, and churches rang their bells at midnight to mark the occasion.

Ali Abunimah, Palestinian-American activist and founder of Electronic Intifada, told Al Jazeera that the celebrations were uncalled for and that the UN was a “giant distraction.”

“I wish that all this hype and dancing in the streets of Ramallah and self-delusion among the people were for a real achievement that actually returned rights to the Palestinian people.

“There is something incongruous and tasteless about the Palestinian Authority sponsoring a dance festival on the streets of Ramallah while families in Gaza are still mourning their children.

“This (vote) is a giant distraction. A cheap gesture, which allows people to celebrate as if they were in a football match.”

Abbas addressed the General Assembly, saying that Palestinians were not seeking to “de-legitimize” Israel, but to affirm the legitimacy of Palestine as a state.

Abbas referenced the recent Israeli assault on Gaza, saying that Palestine had come to the UN at time when they were “still tending to (their) wounds and still burying (their) beloved martyrs of children, women and men who have fallen victim to the latest Israeli aggression”.

“What permits the Israeli government to blatantly continue with its aggressive policies and the perpetration of war crimes stems from its conviction that it is above the law and that it has immunity from accountability and consequences (…) The moment has arrived for the world to say clearly: Enough of aggression, settlements and occupation.”

“The General Assembly is called upon today to issue a birth certificate of the reality of the State of Palestine.”

“The moment has arrived for the world to say clearly: Enough of aggression, settlements and occupation.”

Mark Regev, spokesman for Israeli Prime Minister Benjamin Netanyahu, told Al Jazeera that the comments made by Abbas “make it more difficult” for Israel to negotiate with Palestine.

“Instead of speaking the language of reconciliation, we had libelous charge after libelous charge against the Israeli people.”

Regev called “a distortion of history” how Abbas characterized the UN resolution calling for a two-state solution exactly 65 years ago.

“The way he talked about it. He forgot the most important thing. It was the Israeli side, the Jewish side that accepted accepted two states for two people.”

Hanan Ashrawi, member of the Palestine Liberation executive committee, argues that the pursuit of statehood is both a human right and a necessary diplomatic step to reaching unity in the region, however:

“Rather than being perceived as a substitute for negotiations, our efforts are consistent with the international community’s objective of achieving a peaceful solution whereby Palestine and Israel can live side by side in peace and security. This aim will never be achieved by giving one of these states a veto on the other’s existence. We are trying to create momentum for progress and credibility for legal and political solutions. Negotiations can work only if Israel is given a clear signal that it must abide by the laws of nations and the values of humanity at large.”

–Al Jazeera, TAAN, Common Dreams