"We obviously disagree with our oldest ally on this issue. They know that we disagree with them," State Department spokeswoman Victoria Nuland said. "But it's their sovereign decision to make, how to proceed."
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She confirmed that if a vote goes ahead as planned in the UN General Assembly this week, the United States will vote against the Palestinian request, which Washington regards as "a mistake."
"We're focused on a policy objective on the ground for the Palestinian people, for the people of Israel, which is to end up with two states that can live peacefully next to each other," Nuland told journalists.
"Nothing in this action at the UN is going to take the Palestinians any closer to that. If there is a vote, we will vote 'no'. And we said that yesterday. I say it again today."
Bid to sail through
France is the first major European power to voice approval of the Palestinian move to upgrade its current permanent observer status, while Britain has said it has yet to decide on its position.
The proposal is set to sail through as it has the backing of the majority of the UN's 193 member states, with diplomats predicting that between 11 and 15 EU countries could back the Palestinian proposal.
Amid a flurry of US diplomatic efforts to try to head off a vote, Nuland also confirmed that Secretary of State Hillary Clinton had been in touch with British Foreign Secretary William Hague on the issue.
"It's, you know, a British call how they want to take this forward. They know exactly where we stand as well," she said.
The US believes that the Palestinian move "inflames the situation between the parties, makes it harder for them to come to the table, makes the political situation harder between them," she said.
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