France on Tuesday said it will back a Palestinian bid for enhanced UN status at a General Assembly vote this week, a move hailed by the Palestinians as a "historic" step in their quest for greater global recognition.

Triggering public disagreement from close ally the United States, French Foreign Minister Laurent Fabius said Paris had a "consistent position" in support of recognising a Palestinian state.

He told the National Assembly that France, one of the five permanent members of the UN Security Council, would vote for "non-member observer state" status for the Palestinians.

France is the first European power to voice its approval of the Palestinian move to upgrade its current permanent observer status.

The proposal is set to sail through as it has the backing of the majority of the UN's 193 member states.

It will improve the chances of the Palestinians joining the International Criminal Court and UN agencies. The Palestinians want to launch legal action in The Hague-based court to challenge Israel's occupation of the West Bank.

"We will vote with coherence and clarity," Fabius said.

"You know that for years and years France's consistent position has been the recognition of the Palestinian state," he said, recalling that former French president Francois Mitterrand had staked out that stance in a 1982 speech to the Israeli parliament.

That line was unchanged even during the tenure of former rightwing president Nicolas Sarkozy when Palestine was admitted to UNESCO last year, he said, adding that recognition of Palestine was one of current President Francois Hollande's campaign planks.

"That is why when the question is raised on Thursday and Friday, France will respond with a 'yes'," he said.

The draft resolution seeking the status upgrade also calls on the UN Security Council to "consider favourably" the Palestinian request for full membership made one year ago.

The United States, Israel's staunch ally, had blocked that move at the 15-nation council.

The United States and Israel have opposed the UN application, insisting that only direct talks on a peace accord can produce an agreement that will create a Palestinian state.

"We obviously disagree with our oldest ally (France) on this issue. They know that we disagree with them," State Department spokeswoman Victoria Nuland said in Washington. "But it's their sovereign decision to make, how to proceed."

Nuland told journalists that Washington is focused on the goal of "two states that can live peacefully next to each other".

She added: "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'."

The Palestinian envoy to the United Nations on Tuesday urged other powers to follow France's example, which he hailed as a landmark step.

"It is of a magnitude of a historic level and I am sure that many other European countries will follow the example of France and we thank them in advance for being on the side of history and the side of humanity," Palestinian envoy Riyad Mansour told reporters.

Israel had little to say on the development, with the foreign ministry merely saying that it was "no surprise".

"We knew that France was inclined to vote for this resolution, so we expected as much," spokesman Yigal Palmor told AFP in an email.

Britain, also a permanent member of the Security Council, has not yet decided whether it will vote for the resolution, said the country's UN ambassador, Mark Lyall Grant.

He told reporters that Britain believes the Palestinians should delay their application, but is still in talks with the Palestinian Authority and will decide "in due time" how to vote.

The Austrian foreign ministry also said Tuesday it would back the bid and claimed that more than half the European Union's 27 member states would vote for it.

Diplomats have predicted that between 11 and 15 EU countries could back the Palestinian proposal.

The new resolution will also call for a Middle East settlement that "fulfils the vision of two states, an independent, sovereign, democratic, contiguous and viable state of Palestine, living side-by-side in peace and security with Israel, on the basis of the pre-1967 borders."

It also highlights the "urgent need" for a resumption of peace talks, frozen in September 2010 when Israel refused a Palestinian demand to extend a moratorium on settlement building in the occupied territories.

Fabius on Tuesday also highlighted what he called the "extremely fragile" nature of last week's ceasefire between Israel and Hamas in the Gaza Strip.

"It's only through immediate and unconditional negotiations between the two sides, which we are seeking, that one can fulfil the creation of a Palestinian state," he said.

The Palestinian territories are already gripped by their worst economic crisis in decades but the Palestinians say they are going to the UN General Assembly out of frustration at the lack of progress in peace talks during Obama's first term.

VietNamNet/AFP