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UNITED NATIONS – The move by the Palestinian Authority to enhance its status in the U.N. General Assembly sets up a potential confrontation with the Obama administration and Capitol Hill.

At risk could be over $1 billion of U.S. foreign aid.

The vote of 138 yes, nine no and 41 abstentions was short of Palestinian expectations but still managed to draw the ire of the U.S, Israel and Canada.

Congress has gone on record as threatening to block all aid to the Palestinians if they seek full U.N. membership.

The U..N. move of seeking enhanced observer status rather than full outright membership in the assembly is considered a tacit acknowledgement of just how important the U.S. is to the embattled government of President Mahmoud Abbas.

With its new status, the PA will no longer need to make special requests nor ask for sponsors to address the General Assembly.

It could also pave the way for the Palestinians to join the International Criminal Court and pursue action against Israel in a legal forum where decisions are binding.

However, an ICC move by the Palestinians could prompt congressional retaliation.

It is one step short of full recognition. It is also the same route taken by Switzerland, South Korea and North Korea before they gained U.N. membership.

Currently, the only other observer-state is the Holy See.

The vote did spell a significant defeat for U.S.-U.N. Ambassador Susan Rice. Rice lobbied for over a year to kill the PA campaign but to little avail.

All she accomplished was a delay to the move, which had been expected to take place last September at the annual General Assembly debate. That might have impacted the U.S. presidential elections just weeks away in November.

But with the election now history, the White House unofficially accepted the inevitable.

Not only did the PA campaign strain relations with Washington, but it illustrated Rice’s lack of influence within the U.N. community.

That became apparent on Wednesday evening when the State Department dispatched Deputy Secretary of State William Burns to meet Abbas in New York City.

Reports from the meeting say that Abbas personally rejected Burns request to hold off on the U.N. vote.

State Department spokeswoman Victoria Nuland told reporters: “We went up (to New York) to make one more move to make our position known to President Abbas and urge him to reconsider.”

Burns’ effort fell flat, said Foreign Minister Riyad al-Maliki.

“It (a vote delay) would be like asking me to change my name,” said the PA minister.

Former U.S.-U.N, Ambassador John Bolton told WND: “The White House has shown weakness and uncertainty which the P.A. has exploited.”

A visibly irritated Rice lectured the convened diplomats from her seat in the cavernous hall.

“Today’s grand pronouncements will soon fade. And the Palestinian people will wake up tomorrow and find that little about their lives has changed, save that the prospects of durable peace have only receded,” Rice said.

For the PA, the elevated status is believed to grant de facto recognition of its borders.

With peace talks in suspension for more than two years, Jerusalem believes that the PA move was an effort to achieve at the U.N. what the PA has yet to achieve in any peace negotiations.

Israeli Prime Minister Benjamin Netanyahu explained that the pressure of the General Assembly move will harden rather than soften his government’s position that direct talks offer the only solution to the on-going crisis.

Speaking in Jerusalem, Netanyahu remained defiant: “The U.N. can’t force Israel to compromise on security. … No force in the world will get me to compromise Israel’s security.”

He continued, “The (U.N.) vote will change nothing on the ground.”

In New York, Israel’s U.N. ambassador, Ron Prosor, was just as defiant.

“No decision by the U.N. can break the 4,000-year-old bond between the people of Israel and the land of Israel,” he said.

Meanwhile, parades and partying took place well into the night in the West Bank capital of Ramallah and in the Gaza Strip, which only a week ago was the scene of fierce fighting between Palestinians and Israelis.

In Israel there was silence.

While Netanyahu may proclaim that facts on the ground “will not change,” the fact that Britain, France and Germany, traditional allies of Israel, did not block the Palestinian campaign, should give Jerusalem some concern in the days ahead.

Perhaps sensing those same concerns, the Palestinian delegation left the U.N. Thursday evening avoiding contact with the assembled press.

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