* Status upgrade likely to pass at U.N. on Thursday
* Israel and its ally the U.S. oppose the move
* 13 European states pledge to support Palestinians
* Britain says wants commitment to peace talks
By Louis Charbonneau
UNITED NATIONS, Nov 28 (Reuters) - A Palestinian bid for indirect U.N. recognition of statehood received vows of support from more than a dozen European nations as of Wednesday, and diplomats said this backing may deter Israel from harsh retaliation against the Palestinian Authority for seeking to upgrade its U.N. status.
A Palestinian resolution on Thursday that would change its U.N. observer status from an "entity" to a "non-member state," implicitly recognizing the sovereign state of Palestine, is expected to pass easily in the 193-nation U.N. General Assembly. But Israel, the United States and a handful of other members of are expected to vote against it.
Palestinian President Mahmoud Abbas has been leading the campaign to win support for the resolution, and some European governments have offered him their support after an eight-day conflict this month between Israel and Islamists in the Gaza Strip, who are pledged to Israel's destruction and oppose his efforts towards a negotiated peace.
The U.S. State Department said Deputy Secretary of State Bill Burns and U.S. Mideast peace envoy David Hale traveled to New York on Wednesday in a last-ditch effort to get Abbas to reconsider.
"We've been clear, we've been consistent with the Palestinians, that we oppose observer state status in the General Assembly and this resolution," State Department spokeswoman Victoria Nuland said.
She repeated U.S. warnings that the move could hit U.S. economic support for the Palestinians. The Israelis have also warned that they might take deductions out of monthly transfers of duties that Israel collects on the Palestinians' behalf.
The United States and Israel say the only genuine route to statehood is at the negotiating table, through a peace accord hammered out in direct talks with Israel.
Granting Palestinians the title of "non-member observer state" falls short of full U.N. membership - something the Palestinians tried but failed to achieve last year. But it would allow them access to the International Criminal Court and some other international bodies, should they choose to join them. The Vatican numbers among the U.N.'s non-member states.
Hanan Ashrawi, a top Palestinian Liberation Organization (PLO) official, told a news conference in Ramallah that "the Palestinians can't be blackmailed all the time with money."
"Some rights aren't for sale," Ashrawi said. "If Israel wants to destabilize the whole region, it can. We are talking to the Arab World about their support if Israel responds with financial measures, and the EU has indicated they will not stop their support to us."
ISRAELI RETALIATION MIGHT BE MODERATE
As there is little doubt about how the United States will vote when the Palestinian resolution to upgrade its U.N. status is put to a vote sometime after 3 p.m. EST (2000 GMT) on Thursday, the Palestinian Authority has been concentrating its efforts on lobbying wealthy European states, diplomats say.
With strong support from the developing world that make up the majority of U.N. members, the Palestinian resolution is virtually assured of securing more than the requisite simple majority. But Abbas has been trying to amass as many European yes votes as possible.
"A strong showing in Europe will emphasize to Israel and the United States that the Palestinian Authority is widely seen legitimate," a Western envoy said on condition of anonymity. "It may also give Israel second thoughts about trying to bankrupt the Palestinians for something that is really symbolic."
One senior Western diplomat predicted that at least 120-130 countries would vote for the Palestinian resolution.
As of Wednesday afternoon Austria, Denmark, Norway, Finland, France, Greece, Iceland, Ireland, Luxembourg, Malta, Portugal, Spain and Switzerland had all pledged to support the Palestinian resolution. Britain said it was prepared to vote yes, but only if the Palestinians fulfilled certain conditions.
Ashrawi said the positive responses from European states were encouraging and sent a message of hope to all Palestinians.
"This constitutes a historical turning point and opportunity for the world to rectify a grave historical injustice that the Palestinians have undergone since the creation of the state of Israel in 1948," she said.
A strong backing from European nations could make it awkward for Israel to implement harsh retaliatory measures. Diplomats say that Israel seems hesitant to take strong action against Abbas as it would antagonize Western European countries.
But Israel's reaction might not be so measured if the Palestinians seek ICC action against Israel on charges of war crimes, crimes against humanity or other crimes the court would have jurisdiction over.
It also seems wary of weakening the Western-backed Abbas, especially after the political boost rival Hamas received from recent solidarity visits to Gaza by top officials from Egypt, Qatar and Tunisia.
Hamas militants, who control Gaza and have had icy relations with the Palestinian Authority in the West Bank, unexpectedly offered Abbas their support earlier this week.
STALLED PEACE TALKS
No European nations announced they would vote against the non-member state move, though several U.N. diplomats said privately that the Czech Republic and Netherlands might be among those that cast no votes. Neither has announced an official position.
Germany said it could not support the Palestinian move though it was not clear if it would abstain, like Estonia and Lithuania, or vote against it.
Europe's undecided countries included European Union members Belgium, Bulgaria, Hungary, Italy, Latvia, Poland, Romania, Slovakia and Sweden. Several EU members said they were hoping the 27-nation EU would reach a common position on the Palestinian move, though U.N. diplomats said that EU unity was an impossibility.
Peace talks have been stalled for two years, mainly over the issue of Israeli settlements in the West Bank, which have expanded despite being deemed illegal by most of the world.
In their draft resolution, the Palestinians have pledged to relaunch the peace process immediately following the U.N. vote.
Britain said it would be willing to support the Palestinian move on Thursday if two conditions were met.
"The first is that the Palestinian Authority should indicate a clear commitment to return immediately to negotiations without preconditions," Foreign Seretary William Hague told parliament.
"The second assurance relates to membership of other specialized U.N. agencies and action in the International Criminal Court," he added.
Rights groups said that stance contradicted Britain's stated commitment to accountability for serious crimes.
Israel and the United States have mooted withholding aid and tax revenue that the Palestinian government in the West Bank needs to survive. Israeli Foreign Minister Avigdor Lieberman has also viewed options that include bringing down Abbas.