Palestinian President Mahmoud Abbas on Friday turned down Washington's request to withdraw the draft resolution demanding Israel halt settlement expansion on occupied Palestinian land.

The decision was made unanimously during a meeting of the Palestine Liberation Organization's executive and the central committee of Abbas's Fatah movement, convened to discuss U.S. President Barack Obama's appeal to Abbas on Thursday.

Open gallery view A protester in the West Bank village of Bilin near Ramallah on Feb. 18, 2011. Credit: Reuters

"The Palestinian leadership has decided to go on to the UN Security Council to pressure Israel to halt settlement activities. The decision was taken despite American pressure," said Wasel Abu Yousef, a PLO executive member.

Washington has made it clear that it will veto the resolution should it come to a vote, and has implored the Palestinian Authority and other Arab nations to withdraw the proposal, but to no avail.

The UN Security Council is scheduled to start discussions later on Friday on a draft resolution that Arab states submitted in January, demanding that Israel halt settlement activities in the West Bank and East Jerusalem.

The point of the resolution, foreign diplomats say, is to highlight Washington's isolated position on the Security Council, show the Palestinian population that the Palestinian Authority is taking action, and to pressure Israel and the United States on the settlement issue.

The resolution has nearly 120 co-sponsors, exclusively Arab and other non-aligned nations. UN diplomats said that the draft would probably receive 14 votes in favor and the one veto if put to an immediate vote.

The Palestinians say continued building flouts the internationally-backed peace plan that will permit them to create a viable, contiguous state on the land after a treaty with Israel to end its occupation and 62 years of conflict.

Israel says this is an excuse for avoiding peace talks and a precondition never demanded before during 17 years of negotiation, which has so far produced no agreement.

Obama, who has said Israeli settlements in territories it captured in a 1967 war are illegal and unhelpful to the peace process, is opposed to a UN move that in Washington's view could shatter hopes of reviving the stalled talks.

The Obama administration is, however, embarrassed by the episode, because the Palestinian proposal accurately reflects their own stated official position on the settlements, which makes it difficult to oppose the resolution and has led to extensive efforts out of Washington to halt the vote.

In a 50-minute phone call, he asked Abbas to drop the resolution and settle for a non-binding statement condemning settlement expansion, Palestinian officials said.

Abbas on Friday received a follow-up call from Secretary of State Hillary Clinton on the issue, the Palestinian news agency Wafa said.

"Caving in to American pressure and withdrawing the resolution will constitute Goldstone 2," said a Palestinian official, speaking on terms of anonymity.

He was referring to the wave of protest in October 2009 accusing Abbas of caving in to U.S. pressure by agreeing not to submit for adoption a UN report that accused Israel and Hamas Islamists of war crimes during the brief Gaza war two years ago.

Abbas was hanged and burnt in effigy by pro-Hamas supporters furious over the move. Abbas maintains he insisted on submitting the report.

Fear of popular revolt

"It will be a political catastrophe if we withdraw this resolution," said a second Palestinian official.

"People would take to the streets and would topple the president," he said, noting the wave of protest in the Arab world that swept out the Egyptian and Tunisian presidents.

The diplomatic maneuvering is complicated by the effects of Middle East turmoil on the Arab League, whose members backed the draft resolution.

Egypt, a dominant member, and Tunisia are preoccupied with the transition from deposed autocracies, and protests are flaring in Libya, Yemen and Bahrain.

Obama told Abbas he would back a fact-finding visit by a delegation of the Security Council to the occupied territories.

UN sources in New York say no one wants to see a U.S. veto should a resolution unacceptable to Obama be put to a vote. But the Palestinian leadership feels backing off is not an option.

One option, however, is to take no action on the draft.

Hundreds of Palestinian protesters rallied on Friday near Ramallah displaying banners demanding: "Veto settlements. Vote justice".