Mr Hague – who was criticised by MPs of all parties for his stance – is facing intense pressure from Gulf states to shift the UK’s position ahead of the UN general assembly meeting in New York.
Britain could also find itself isolated within the European Union if it refuses to support the Palestinian application for non-member observer status at the UN.
The vast majority of UN members, including France and Spain, are expected to support the application, although the move will be strongly opposed by the United States, and of course, Israel.
In a Commons statement, Mr Hague told the Palestinians they would only gain Britain’s backing if they promised an “immediate and unconditional” resumption of negotiations with Israel and pledged not to ask for the jurisdiction of the International Criminal Court (ICC) to be extended over the Occupied Territories.
He said: “Up until the time of the vote itself, we will remain open to voting in favour of the resolution if we see public assurances by the Palestinians on these points. However, in the absence of these assurances, the United Kingdom would abstain on the vote.”
Mr Hague argued that if Palestine maintained the ICC demand it could “make a return to negotiations impossible”. He said Britain was still committed to a negotiated settlement with a “safe and secure Israel living alongside a viable and sovereign Palestinian state”.
But he claimed: “If progress on negotiations is not made next year, then the two-state solution could become impossible to achieve.”
The shadow foreign secretary, Douglas Alexander, argued that it was unreasonable to expect the Palestinians make an unconditional commitment to resume talks while the Israelis were still building settlements on the West Bank, which are deemed illegal under international law.
“Statehood for the Palestinians is not a gift to be given but a right to be acknowledged,” he said.
“If the United Kingdom abstains tomorrow it will not be a measure of our growing influence, it will be confirmation of our growing irrelevance to meaningful engagement in the search for peace. Abstention tomorrow would be an abdication of Britain’s responsibilities.”
The former Liberal Democrat leader, Sir Menzies Campbell, said: “Britain's failure to support the motion will cause profound damage to our reputation in the Middle East and flies in the face of public opinion at home and abroad.”
Britain risks becoming increasingly isolated over issue, especially as a number of European countries have no come out in favour of the Palestinian bid. Spain became the latest today.
"Spain will vote 'yes' tomorrow to the Palestinian request in line with our history," Foreign Minister Jose Manuel Garcia-Margallo told the parliament in Madrid.
The bid for non-member observer status comes 12 months after the President Mahmoud Abbas applied to the UN for full membership, a move that was vetoed by the Security Council. Non-member observer states are recognized as sovereign states, and are free to submit a petition to join as a full member at their discretion. The only other current non-member state is the Vatican.
The Conservative MP, Nicholas Soames, acknowledged the “fiendish difficulties” of the Middle East situation, but told Mr Hague he had adopted a “one-sided and grossly unfair” position.
Mr Hague told MPs he had appealed to the Palestinian president, Mahmoud Abbas, whom he praised as a “courageous man of peace”, not to move the resolution, but to give the newly-elected Barack Obama the opportunity to launch a fresh peace initiative.
More than 100 MPs from across the political spectrum – including the former Labour Foreign Secretary Jack Straw – have signed a parliamentary motion supporting UN recognition of Palestine.
Meanwhile, Palestinians are preparing to mark their most significant diplomatic achievement later today with a series of street festivals, parties and religious services.
Preparations were under way for celebrations across the West Bank on Thursday leading up to the UN vote, which is expected to be announced in the early hours of Friday morning. A large stage was under construction in the main street of Ramallah, where thousands of people are expected to join a street party with music and traditional Palestinian dancers beginning at noon and stretching into the night. In Jenin, celebrations will include Palestinians who are also Israeli citizens.
In Bethlehem, Christian Palestinians will lead a candle-lit vigil outside the Church of the Nativity, the traditional birthplace of Jesus. A thanksgiving mass is scheduled for Sunday in the main Catholic church in Ramallah.
Most of the celebrations will be held far from Israeli territory, except for large banners that officials plan to display at across major landmarks in Israeli-controlled territory in the West Bank and East Jerusalem. Israeli officials are unlikely to welcome the slogan in Arabic, English and Hebrew declaring: “Occupied territory of the state of Palestine” draped across King Herod’s winter palace at Herodion, the Church of the Holy Sepulchre in Jerusalem and the Damascus Gate of Jerusalem’s Old City.
Israel has decided to keep a low profile as they face certain defeat after an intense campaign to try and persuade the Palestinians to withdraw their UN application. Israeli Foreign Minister Avigdor Liberman will be in the United States today but will be attending a forum in Washington rather than the General Assembly debate.
Hanan Ashrawi, a member of the PLO Executive Committee, told reporters in Ramallah that she was encouraged by the late surge of support from several European countries.
"This constitutes a historical turning point and opportunity for the world to rectify a grave historical injustice that the Palestinians have undergone since the creation of the state of Israel in 1948,” she said.
“Rather than being perceived as a substitute for negotiations, our efforts are consistent with the international community’s objective of achieving a peaceful solution whereby Palestine and Israel can live side by side in peace and security. All we want is freedom, dignity and self-determination,” she said.
Thursday is the 65th anniversary of the UN partition resolution creating two states in Palestine. Back then, the Arab countries voted against and immediately launched a military attack on the nascent state of Israel.
The bid for non-member observer status comes 12 months after the President Mahmoud Abbas applied to the UN for full membership, a move that was vetoed by the Security Council. Non-member observer states are recognized as sovereign states, and are free to submit a petition to join as a full member at their discretion. The only other current non-member state is the Vatican.
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