UNITED NATIONS  – The United States was locked in confrontation with Palestinian leaders Friday, as the UN Security Council began debate on a controversial resolution condemning Israeli settlements.

Despite intense diplomacy from US President Barack Obama and Secretary of State Hillary Clinton, the Palestinians have refused to step back from forcing a UN vote on the resolution declaring settlements illegal. Despite intense diplomacy from US President Barack Obama and Secretary of State Hillary Clinton, the Palestinians have refused to step back from forcing a UN vote on the resolution declaring settlements illegal.

Washington had hoped to head off any vote and the prospect it would be forced to use its veto to shield Israel, in a move which would anger Arab allies already tetchy over the US response to revolts sweeping the Middle East.

The resolution, sponsored by 130 countries, "reaffirms that the Israeli settlements established in the Palestinian Territory occupied since 1967, including East Jerusalem, are illegal and constitute a major obstacle to the achievement of a just, lasting and comprehensive peace."

It also "reiterates its demand that Israel, the occupying power, immediately and completely ceases all settlement activities in the Occupied Palestinian Territory."

The debate began behind closed doors and a vote was expected later Friday.

US officials have yet to say publicly whether they would veto the resolution, but a failure to do so would widen a rift between Obama and Israeli Prime Minister Benjamin Netanyahu and mark a significant shift in US policy on Israel.

Defying US pressure, Palestinian leaders voted at an emergency meeting Friday to stick with their campaign for a UN condemnation of Israeli settlement.

"The Palestinian leadership took the decision to go to the UN Security Council tonight," the Palestine Liberation Organization's Yasser Abed Rabbo told AFP.

The row is dealing a further blow to the US bid to forge a Palestinian state this year, which fell into disarray after Israeli-Palestinian talks collapsed in 2010 over the expiry of a moratorium on Jewish settlement building.

In a bid to appease the Palestinians, the United States had offered to sign up to a non-binding Security Council presidential statement condemning settlement building -- raising the ire of US lawmakers who back Israel.

The United States traditionally uses its veto power in the Security Council, a body Israel deems as deeply biased, to shield the Jewish state from censure. It argues a peace process and not the UN is the proper forum for such disputes.

Washington says it views construction of new Israeli settlements on land claimed by Palestinians as counterproductive to peace hopes.

It however has not deemed settlements "illegal" on the basis that such judgments are fraught with legal ramifications which could prejudice eventual final status peace talks.

The Palestinians are frustrated that Washington has not done more to rein in the construction of Jewish settlements, which they say are altering on-the-ground realities for territory they claim as part of their future state.

Abbas on Friday turned down US entreaties to back the non-binding statement in a call with Clinton, Abbas's office said.

Palestinian officials said Abbas had turned down a request by Obama to withdraw the motion for condemnation and settle instead for a council statement calling for an Israeli settlement freeze.

One senior Palestinian official, speaking on condition of anonymity, told AFP the offer, made in an hour-long phone call late Thursday from Obama, was accompanied by veiled threats of "repercussions" if it were refused.

"There will be repercussions for Palestinian-American relations if you continue your attempts to go to the Security Council and ignore our requests in this matter, especially as we suggested other alternatives," the official quoted Obama as telling Abbas.

US officials declined to characterize the call.

But White House spokesman Jay Carney said Thursday that "we, like every administration for decades, do not accept the legitimacy of continued settlement activity."

He added, "We believe their continued expansion is corrosive not only to peace efforts and a two-state solution, which we strongly support, but to Israels future itself."

Earlier this week, US ambassador to the United Nations Susan Rice proposed a three-fold package of incentives for Palestinians: a non-binding Security Council statement condemning settlement activity, a visit by a UN Security Council delegation to the region and a Mideast Quartet statement referring to 1967 borders in reference to a Palestinian state.