Story highlights The Security Council holds its first substantive debate on the issue

The Palestinian Authority hopes the application will be accepted

The U.N. General Assembly could vote to upgrade the status of Palestinians

The body change the Palestinians to a permanent observer "state"

A U.N. committee will issue a report on its analysis of the historic Palestinian bid for statehood in two weeks, the Security Council president said Friday.

The announcement by Lebanese U.N. Ambassador Nawaf Salam, who holds the rotating Security Council presidency for September, came after the Council held its first substantive debate on the application since it was submitted by Palestinian President Mahmoud Abbas.

Several diplomats said after the meeting that there is a consensus about the need to deal with the matter swiftly and seriously.

"It was a good meeting," said British Ambassador Mark Lyall Grant. "We set out our positions, mainly on procedural issues, but some substantive."

If a committee majority says the prospective Palestinian state fulfills the U.N. charter's requirements, it will send the application back to the full Security Council for a vote.

The Palestinians would then need nine of 15 votes in their favor, and no veto from any of the five countries that are permanent members of the council.

U.S. officials have vowed to block the measure, though they most likely want to avoid an American veto out of concern over a potential backlash across the Middle East.

The General Assembly, however, could still vote to upgrade the status of Palestinians, who currently hold the status of nonvoting observer "entity." The body could change that status to permanent observer "state," identical to the Vatican's standing at the United Nations.

U.S. President Barack Obama has said he supports Palestinian statehood but has remained steadfast to a longstanding U.S. position that Israel must be part of the discussions.

Abbas' effort to gain U.N. recognition of a Palestinian state is also opposed by Hamas, the Palestinian organization that controls Gaza.

It has warned the Palestinian leader against making the request, saying it would show a willingness to acknowledge and negotiate with Israel, which would "deprive the Palestinian people from their right to come back to their homeland."

Despite the push in New York, negotiations remain the preferred option for the Palestinian Authority going forward, according to Palestinian negotiator Saeb Erakat, who said Israel's refusal to halt settlement activity and accept 1967 lines as the starting point for talks make the resumption of dialogue impossible.

The Palestinians claim the land Israel occupied in East Jerusalem and the West Bank after the 1967 war as part of a future Palestinian state.

"We're asking the Israeli government to say in any language -- Arabic, Hebrew, English, Chinese, French," Erakat said Thursday after a meeting of the PLO executive committee. "Netanyahu please say it -- two states on 1967 lines for Palestine to live side by side with the state of Israel. If he cannot utter these numbers and these words, what does he want to do with me?"

But Netanyahu has said the Palestinians are looking for a "state without peace," ignoring security concerns important to Israel.

He said Palestinians are armed not only with their "hopes and dreams" -- a phrase Abbas used in a September 23 speech before the U.N. General Assembly -- but with "10,000 missiles, and Grad rockets supplied by Iran, not to mention the river of lethal weapons flowing into Gaza."

"Palestinians should first make peace with Israel and then get their state," Netanyahu said as he followed Abbas to the rostrum, adding that peace must arrive through a two-state solution that recognizes Israel as a Jewish state.

If that occurs, Israel "will be the first" to recognize Palestinian statehood, the prime minister said.

Lower-level envoys from the Security Council members will meet again on the issue next week, according to Ambassador Salam.