The UN General Assembly has voted to grant Palestinians non-member observer state status.
President Mahmoud Abbas told the assembly on Thursday the vote was the "last chance to save the two-state solution" with Israel.
The assembly voted 138-9 in favour, with 41 nations abstaining. Three other countries did not take part.
"Sixty five years ago on this day, the United Nations General Assembly adopted resolution 181, which partitioned the land of historic Palestine into two states and became the birth certificate for Israel," Mr Abbas told the assembly.
"The General Assembly is called upon today to issue a birth certificate of the reality of the State of Palestine," he said.
Mr Abbas, has called the vote an historic moment.
But a spokesperson for the Israeli prime minister, Mark Regev, says it changes nothing on the ground.
And Israel's ambassador to the UN, Ron Prosor said "the only way to reach peace is through agreements" between the parties, not at the United Nations.
There were jubilant scenes on the West Bank following the decision. CNN reports crowds gathered in the city of Ramallah, waving flags and chanting "God is great."
After the vote, US ambassador to the UN, Susan Rice, urged Palestinians and Israel to resume direct peace talks and warned against unilateral actions.
US Secretary of State Hillary Clinton said the vote put more obstacles on the path to peace.