PALLESTINIANS' UN STATUS UPGRADE, AMERICA' STAND AND THE REACTION OF ISRAEL.

Standing before throngs of cheering supporters Sunday, Palestinian Authority President Mahmoud Abbas called for an end to the division among Palestinians in the wake of the United Nations upgrading the authority's status -- as Israel refused to acknowledge that newfound recognition.

"The people who have achieved the accomplishment of the 29th of November, when the world wrote the birth certificate of the state of Palestine, are capable of imposing the will of the people in making the reconciliation happen," he said at a packed rally in Ramallah.

The U.N. General Assembly on Thursday elevated the authority's status from "non-member

observer entity" to "non-member observer state" -- the same category as the Vatican.

Palestinian leaders had previously launched a failed bid for full U.N. membership.

Abbas is a part of the Palestinian faction Fatah, which controls the West Bank. Gaza is controlled by Hamas, which has battled Fatah for power and -- until last week -- long opposed its efforts to achieve the status upgrade.

Abbas, speaking Sunday, said there are "a lot of missions" ahead, and the "most important is to restore our national unity and achieve reconciliation."

Israel and the United States have slammed the authority's move at the United Nations, with U.S. Secretary of State Hillary Clinton said Friday it was "a step that will not bring us closer to peace."

And, in response to the U.N. move, Israeli Prime Minister Benjamin Netanyahu refused Sunday to reconsider a plan to build thousands of new homes in occupied territory.

The United States and a number of European nations called on Israel to roll back the settlement plan in the West Bank and East Jerusalem, which was announced Friday.

Israeli settlements are widely considered illegal under international law, though Israel insists they are not.

"The answer to the attack on the Zionist character of the state of Israel obliges us to increase the tempo of settlement building plans in all the areas that the government has decided to settle in," Netanyahu said in remarks before the start of his weekly Cabinet meeting in Jerusalem.

He said he was citing "the language of the government decision in 1975 after the U.N. decision that equated Zionism with racism."

Netanyahu has called the Palestinian Authority's U.N. bid "a gross violation" of an agreement signed with the Israeli government. Israel says it violates a Palestinian agreement to work out central issues through negotiation.

 Netanyahu has not publicly acknowledged the approval of new construction. But a senior government official said Saturday that the prime minister signed off on building "3,000 housing units" in the East Jerusalem as well as authorizing planning and zoning for future construction in the West Bank town of Ma'ale Adumim.

The Obama administration has repeatedly warned Israel against settling East Jerusalem and the West Bank, particularly the Ma'ale Adumim area, because it would make it nearly impossible to create a contiguous Palestinian state.

The Israeli Cabinet, in a unanimous vote Sunday, rejected the U.N. General Assembly's decision, saying it changes nothing and will not be a basis for negotiations.

The creation of a Palestinian state will require "arrangements that ensure the security of the citizens of Israel, recogntion of Israel as a Jewish state, and a declaration by Palestinians that the conflict is over," the Cabinet statement.

Israel seized the West Bank, Gaza, Golan Heights and Sinai Peninsula during the 1967 war. The Sinai has since been returned to Egypt. Israel annexed the Golan Heights in 1981, a move not recognized by the international community and condemned by Syria, which still claims the land.

Israel withdrew settlers from Gaza in 2005. Hamas has since regularly launched rocket attacks into southern Israel. The Palestinian bid to the United Nations and news of Israeli settlement construction came just days after a cease-fire took hold between Israel and Hamas that brought about an end to a series of Israeli military airstrikes against Gaza launched in an effort to stop the Hamas rocket attacks.

Hezbollah, a militant group and political party in Lebanon, has launched attacks on Israel from the north.

Both Hezbollah and Hamas receive support from Iran. A senior U.S. official told CNN last week that Iran is "finding ways to resupply Hamas" with long range rockets and other weapons.

The European Union, the United States, and Israel consider Hamas a terrorist organization. The United States and Israel also consider Hezbollah a terrorist group.

The Palestinian Authority's new U.N. status allows it to have cases heard before the International Criminal Court -- a concern for Israel as Palestinians have repeatedly tried to have their claims heard before the judicial body at the Hague.

International efforts for a "two-state solution" focus on a plan to unite Gaza and West Bank under the authority of a single Palestinian government. Palestinian leaders want the capital in east Jerusalem.

Palestinian officials have refused to enter into new talks with Israel until it stops building settlements on West Bank land. Netanyahu, meanwhile, has said there can be no such preconditions on talks. He has called on Hamas to renounce terrorism and accept the existence of Israel.