Palestinian leaders have reaffirmed their determination to seek United Nations membership, setting President Barack Obama hurtling toward a diplomatic disaster that could set back the Palestinian-Israeli peace process and shatter America's credibility in a transformed Middle East.

Obama maintains that direct negotiations between Israel and the Palestinians remains the only route to reconciliation, but American diplomats carrying that message have been unable to dissuade Palestinian leadership. Now, America faces the unsavory prospect of vetoing a Palestinian bid for full membership, if the measure is put before the U.N. Security Council, or of being in a minority of countries voting in the General Assembly against Palestine being elevated from an entity to a non-member observer state.

Only a year ago, Obama spoke to the General Assembly of returning with an agreement that will lead to a new member of the United Nations -- an independent, sovereign state of Palestine, living in peace with Israel. But in the midst of cataclysmic changes rippling through the Middle East, Obama will need to reaffirm his support of Israel -- pushed in part by Congressional opposition to the Palestinian statehood and to a growing perception that he has not been a vocal enough of ally of Israel -- by voting against a Palestinian state.

Senior Fellow Sees No Positives from Scenario

This is lose, lose, lose, Andrew Exum, a senior fellow with the Center for a New American Security, told The Associated Press. A resolution before the U.N. Security Council will hurt the United States with the Arabic-speaking world if Obama is seen as standing in the way. The Israeli government and the state of Israel will feel more isolated. And Palestinian frustration will only grow.

The importance of the vote is magnified by the rapidly shifting landscape in the Middle East. Israel's relations with longtime allies Turkey and Egypt are deteriorating rapidly, and an anti-Israel protest in neighboring Jordan underscored the connection between rising hostility towards Israel and pro-Palestinian sentiment stoked by the Arab Spring. An American vote against Palestinian statehood would come with the symbolism of America choosing an increasingly isolated Israel over the spirit of self-determination that has driven the Arab Spring.

Obama told reporters that the United Nations vote was no substitute for a peace process founded on direct negotiations.

This issue is only going to be resolved by Israelis and Palestinians agreeing to something, he said. What happens in New York City can occupy a lot of press attention, but it's not going to actually change what's happening on the ground.