The U.N. General Assembly voted today to approve Palestinians' request to be upgraded to a "non-member observer state," defying opposition by the U.S. and Israel.
Before the vote, Palestinian President Mahmoud Abbas told the General Assembly that it "is being asked today to issue the birth certificate of Palestine."
Of the 193 countries in the General Assembly 138 voted to recognize Palestine. Only nine, including the U.S., voted against it. Another 41 countries abstained.
In the West Bank, Palestinians erupted in a roar of cheers, horn honking and fireworks as crowds thronged the main square of Ramallah to celebrate the world's recognition of their state.
The historic vote recognizes Palestine as a state and gives Palestine the right to join U.N. agencies. It opens the door for Palestine to become a party to the International Criminal Court, allowing them to bring cases against Israel.
Israel and the U.S. argued that the vote is purely symbolic, would change nothing on the ground, would hurt peace talks and could affect U.S. funding.
Most European countries were expected to side with the Palestinians in this dispute.
The only countries voting against the resolution besides the United States and Israel were Canada, the Czech Republic and some Pacific Island states.
U.S. allies France, Sweden and Italy all voted for the resolution, as did countries where the U.S. is expected to hold sway like Mexico, Afghanistan, India and Iraq.
Germany, Poland and the United Kingdom all stayed out of the fray, preferring to abstain.
U.S. Ambassador to the U.N. Susan Rice downplayed the significance of the victorious resolution.
"Today's grand pronouncement will soon fade and the Palestinian people will wake up tomorrow and find that little about their lives has changed, save that the prospects of a durable peace have only receded," Rice said.
"The United States therefore calls upon both the parties to resume direct talks without preconditions on all the issues that divide them and we pledge that the United States will be there to support the parties vigorously in such efforts. The United States will continue to urge all parties to avoid any further provocative actions - in the region, in New York and elsewhere," she said.
Israeli Prime Minister Benjamin Netanyahu's office dismissed the significance of the vote.
"This is a meaningless decision that will not change anything on the ground. Prime Minister Benjamin Netanyahu has made it clear that there will be no establishment of a Palestinian state without a settlement that ensures the security of Israel's citizens," the statement said.
"He will not allow a base for Iranian terrorism to be established in Judea and Samaria [the West Bank], in addition to those that have [already] been established in Gaza and Lebanon... By going to the U.N., the Palestinians have violated the agreements with Israel and Israel will act accordingly," the Israeli statement said.
After the results were announced, U.N. Secretary-General Ban Ki-Moon urged leaders of Israel and Palestine to resume peace talks.
"Today's vote underscores the urgency of the resumption of negotiations," he said.
The vote went ahead despite calls to Abbas from President Obama and other U.S. officials to abandon the bid. Secretary of State Hillary Clinton said Wednesday that only direct Palestinian negotiations with Israel can bring about any real solution.
"We have made very clear to the Palestinian leadership -- you know I met with President Abbas just last week -- that we oppose Palestinian efforts to upgrade their status at the U.N. outside of the framework of negotiations to achieve a two-state solution," Clinton said, "because no matter what happens at the United Nations, it will not produce the outcome that this government, this president and certainly I strongly support."
The vote today falls short of triggering the law in Congress that automatically cuts all U.S. aid to Palestinian Authority and any programs in the Palestinian Territories, as well as aid to any organizations that recognize Palestine as a state. Non-member observer status falls short of being as being accepted as a "member state," which would allow Palestine to have full voting rights in the U.N. General Assembly, something Congress is vehemently opposed to if done outside of talks with Israel.
Though it doesn't reach that automatic trigger, Congress could still act against the Palestinians. The U.S. gives an average of $200 million of aid a year to support the administration of the Palestinian Authority and other programs, but Congress has not yet released the money for this year.
ABC News' Sarah Parnass and ABC Pollster Gary Langer contributed to this report.