The arguments for and against the latest Palestinian bid for statehood status at the United Nations come down to which is the faster path to irrelevancy.

In seeking an upgrade from observer “entity” to a nonmember state, the Palestine Liberation Organization is hoping for a diplomatic victory to preserve the legitimacy of its affiliated Palestinian Authority. But any success at the U.N. is likely to trigger punitive measures by Israel and the United States.

Palestinian Authority President Mahmoud Abbas “is at wit’s end,” said Nathan Brown, a political science and international affairs professor at George Washington University in Washington. “This is being driven by the absence of any viable alternative.”

Palestinian Authority President Mahmoud Abbas addresses U.N. General Assembly on Sept. 25. photo/jta-jcarrier-u.n.

The P.A., facing a fiscal crisis and a resurgent Hamas, is hitting a dead end in setting up statehood infrastructure, Brown said. “Building from the ground up has run its course,” he said. “This seems one of the few places [Abbas] can still act.”

The strategy has its drawbacks. The move is opposed by the United States and Israel, where officials have warned of punitive measures should the Palestinians go ahead with the application.

Yuval Steinitz, the Israeli finance minister, has said he will stop transferring tax revenues to the cash-strapped Palestinian Authority if the U.N. bid succeeds. And a document being circulated by the Israeli Foreign Ministry warns that the Oslo accords could be canceled over the bid, which “would be considered a crossing of a red line.” The document reportedly also calls for “toppling” the P.A. regime if the proposal is approved, the French news agency AFP reported.

American lawmakers, meanwhile, say it could jeopardize the millions in annual American aid to the Palestinian Auth-ority. President Barack Obama reiterated U.S. opposition to the move in a call with Abbas on Nov. 11, the first since his re-election.

The next day, Abbas said he would submit the bid on Nov. 29 — the 65th anniversary of the 1947 U.N. vote calling for two states, one Jewish and one Arab, in Palestine.

“This could be calamitous for the Palestinians themselves,” said Michael Oren, the Israeli ambassador to Washington. “It would not get them closer to real statehood. It would create unrealistic expectations on the ground and it would call into question a number of agreements Israel has with the Palestinian Authority and not with the state of Palestine.”

From the Palestinians’ point of view, achieving statehood status would actually help preserve the two-state solution, said Maen Areikat, the PLO envoy to Washington.

“In the face of the continued Israeli settlement activities and the confiscation of land, the chances of establishing a Palestinian state next to Israel are fading and the international community is not doing anything to hold Israel accountable, especially the United States,” Areikat said.

The Palestinians have been down this road before, but the current bid is more modest than last year’s quest for full inclusion as a U.N. member state, which is subject to approval by the Security Council, where the United States wields a veto. The draft now circulating would grant the PLO nonmember state observer status, defining Palestine as a state within the 1967 lines but not granting it full inclusion. The resolution needs to be adopted only by the larger General Assembly, where the Palestinians are believed to have a majority in their favor.

European Union foreign affairs spokeswoman Maja Kocijancic said “about 12” of the EU’s 27 member states would vote in favor of the bid, according to the EU Observer news site.

Acceptance as a nonmember state could grant Palestinians access to bodies such as the International Criminal Court in The Hague, where they could file complaints against Israel.

Areikat said the recognition would provide Palestinians a basis to return to talks, which they abandoned two years after Israel refused to freeze settlement building. Israeli Prime Minister Benjamin Netanyahu wants the Palestinians to return to talks without preconditions.

“We have an Israeli prime minister who for the last four years has been focused on Iran and not dealing with the Palestinians,” he said. “The aim is not to delegitimize Israel and end cooperation. On the contrary, after we get recognition within the 1967 borders, we are willing to engage the Israelis.”

If the U.N. gambit is successful, it likely would lead to a freeze on some U.S. funds designated for the P.A., which receives more than $500 million in American assistance each year, suggested Rep. Nita Lowey (D-N.Y.), the senior Democrat on the foreign operations subcommittee of the House of Representatives Appropriations Committee.

“The Palestinian Authority’s ability to provide basic services is important to the goal of a Palestinian state living side by side with a state of Israel,” Lowey said. “But there’s no doubt there will be consequences going forward.”

It would be especially difficult to make the case for such aid in the face of intensified rocket fire from the Gaza Strip on Israel, Lowey said.

“It is important to recognize that any discussion about the Palestinian Auth-ority gaining observer status within the U.N. General Assembly is taking place within the context of over 100 rockets hitting Israel in the last three days,” she said early this week. “The leaders have shown they’re unable to stop terrorist attacks from Gaza.”

Lara Friedman, the director of policy and government relations for Americans for Peace Now, said nonmember observer status, unlike full membership, would not trigger laws mandating a cutoff in U.S. funds to the Palestinians or the United Nations. The question, she said, is whether Congress or the president will take steps to impose such consequences regardless.

“With the 2012 elections behind it,” she said, “the Obama administration has far more room to maneuver than it did in 2011 and will no doubt be aware that its reaction to this Palestinian effort will be widely interpreted as a signal of its policy direction for the coming four years.”