In going to the United Nations to push for Palestinian statehood, Palestinian leader Mahmoud Abbas essentially turned his back on the 1993 Oslo peace accord with Israel and U.S.-brokered Mideast peace negotiations.

His campaign was a loud and very public vote of no-confidence in the Obama administration's Middle East policy.

Abbas' insistence on bypassing negotiations with Israel and taking his case directly to the U.N. General Assembly not only violated previous Palestinian agreements with Israel but also those with the United States, which was a co-signatory of the Oslo accords.

Yet the administration has bent over backward to avoid criticizing the Palestinian Authority. The administration's low key, reticent approach has failed to halt the Palestinian U.N. drive for unilateral statehood. This could have far-reaching negative consequences for peace prospects, Israeli-Palestinian relations and regional stability.

Abbas' call for peaceful demonstrations in support of statehood already has led Palestinians to burn American and Israeli flags. Future demonstrations easily could degenerate into violence.

Palestinians leaders are frustrated with what they regard as unfulfilled promises made by the administration, which unwisely raised expectations that it could quickly deliver Palestinian statehood in a final agreement with Israel.

Early on, the Obama administration distanced itself from Israel and moved closer to the Palestinian position on freezing Israeli settlements.

Although Israel agreed to an unprecedented 10-month halt on building settlements in the West Bank, the Palestinians refused to make any compromises. Instead, they expected the United States to compel Israel to cough up more concessions.

The administration's focus on restricting settlements guaranteed friction with Israel's center-right government. It also hardened the Palestinian negotiating position, because President Abbas could not be seen as being less opposed to settlements than the United States.

Thus, Abbas made a settlement freeze a precondition for resuming talks -- even though the Palestinians had negotiated for many years without such a freeze.

On the other side of the table, no Israeli government could agree to a freeze in Jerusalem, absent rapid movement toward a permanent peace agreement.

Ignoring that reality, the administration unwisely pushed in vain for a Jerusalem freeze. Palestinian terrorist attacks, not Israeli settlements, are the chief barriers to peace.

Many Israeli settlements are located in areas that eventually could be folded into Israel in exchange for equal amounts of Israeli territory transferred to Palestinian control, if and when borders are agreed upon in a final settlement.

Now, however, the administration is distrusted by both Israel and the Palestinians and is bracing for a wave of anti-American demonstrations if it vetoes the Palestinian drive for unilateral statehood at the U.N. Security Council.

Washington should press Abbas to drop his refusal to negotiate unless Israel first meets his demand for a settlement freeze. That demand is not supported by the terms of the Oslo accords.

The United States should also declare that it will withhold funding for any U.N. organization that admits Palestine as a state or grants it non-member state observer status. In 1989, after the PLO issued its first "declaration of statehood" and sought to gain U.N. membership, the first Bush administration blocked this effort by threatening to withhold U.S. funding for the United Nations.

The United States should also cut economic aid to the Palestinian Authority if it continues to shun negotiations with Israel and ignore its commitments under previous agreements. The bottom line is that the United States must block any effort to create a Palestinian state that sponsors terrorism or seeks to make an end run around negotiations with Israel.

The United States should leverage its aid to convince Palestinians that the only realistic path to a Palestinian state is through direct negotiations leading to a peace treaty with Israel.

James Phillips is senior research fellow for Middle Eastern Affairs at The Heritage Foundation.