Statehood isn’t some metaphysical essence, but created, like other social facts such as property and marriage, by the recognition of others, in this case, other states. Liechtenstein and the Holy See are states because other states say they are, though they don’t control their own gas supply. The Tamil Tigers, at their peak far bigger than either, were never a state because nobody accepted them as one. Recognition is partly – and for hardcore realists only – a matter of fact: does this entity, however nasty, exercise effective and autonomous control over a territory and population? (Soviet-era Belarus didn’t meet the autonomy part. Lukashenko’s Belarus does.) Partly it’s a long-range moral judgement: does this entity, however unsatisfactory its current leadership and shaky its power, deserve to exist, and enjoy the rights of statehood under international law?
Israel and its US protector have clearly been caught napping by the surprising development of a well-thought-out Palestinian initiative, now backed strongly by Turkey. A draft resolution in the UN Security Council on Palestinian statehood will be vetoed (the US explanation will be interesting reading as it has to address Arabs as well as AIPAC). Another resolution in the General Assembly will pass by a large majority. Following this a lot of countries will recognize Palestine, with more or less fancy footwork over its borders. Palestinian leaders will rename themselves as Ministers, fly new flags on their cars and offices, and lots of ambassadors will be appointed.
The new state will continue to have a bitter dispute with its neighbour Israel over borders, settlements, Jerusalem as the capital, free movement, water, and refugee return: exactly the same disputes that the Palestinian Authority has now. Can anybody explain to me why Palestinian statehood makes these disputes more intractable? And it would clear the air by removing the non-issue of state recognition from the table.