Upgrading the Palestinians' UN status and admitting them as a non-member state may seem like a good idea on the surface but in reality you can't cut corners by giving the Palestinians a state, however you describe it, which does not come from an agreement with Israel," Yigal Palmor, a foreign ministry spokesman told AFP on Friday.

The Palestinians will later on Friday present a formal request to UN chief Ban Ki-moon for UN membership for a Palestinian state in a move which has sparked a wave of opposition from both Israel and the United States.

But Sarkozy on Wednesday proposed a compromise, urging the world body to admit Palestine as a non-member state, upgrading its status from that of an observer entity, without granting it full membership.

Being upgraded from an observer entity to a non-member state would be equivalent to granting them recognition as a state, Palmor said.

"In this, case we can not pretend that Israel did not exist," he said.

Washington has vowed to block the Palestinian request to the Security Council for full membership in a move set to spark a diplomatic showdown, and which has set international diplomats scrambling to find a compromise.

"Each of us knows that Palestine cannot immediately obtain full and complete recognition of the status of United Nations member state," Sarkozy said in his address to the General Assembly, warning that a US veto "risks engendering a cycle of violence in the Middle East."

"Why not envisage offering Palestine the status of United Nations observer state? This would be an important step forward," he said.

Under UN rules, any bid for full membership requires a recommendation from the Security Council and then a two-thirds majority in the 193-member General Assembly.

But upgrading the Palestinians' status to that of a non-member state would require only a straight majority in the General Assembly where no veto is possible.

It would also allow the Palestinians to become a full member of UN agencies such as the World Health Organisation, the child welfare agency UNICEF and the UNESCO world heritage body.