Palestinian president Mahmoud Abbas returned to the West Bank on Sunday after winning upgraded UN status for the Palestinians, telling cheering crowds: "Yes, now we have a state."

Palestinian president Mahmoud Abbas returned to the West Bank on Sunday after winning upgraded UN status for the Palestinians, telling cheering crowds: "Yes, now we have a state."

"Palestine has accomplished a historic achievement at the UN," Abbas added, three days after the United Nations General Assembly granted the Palestinians non-member state observer status in a 138-9 vote.

"The world said in a loud voice... yes to the state of Palestine, yes to Palestine's freedom, yes to Palestine's independence, no to aggression, no to settlements, no to occupation," Abbas told the celebrating crowd.

Abbas pledged that after the victory at the United Nations, his "first and most important" task would be working to achieve Palestinian unity and reviving efforts to reconcile rival factions Fatah and Hamas.

"We will study over the course of the coming days the steps necessary to achieve reconciliation," he said, as the crowd chanted "The people want the end of the division."

The return was a moment of triumph for Abbas, who last year tried and failed to win the Palestinians full state membership at the United Nations.

The United States, the Zionist entity and a handful of other countries also opposed the Palestinian bid to upgrade their status to that of a non-member observer state, but with no vetos available in the General Assembly, the measure easily passed.

The move gives the Palestinians access to a range of international institutions, including potentially the International Criminal Court, and raises their international profile after years of stalled peace talks with the Zionist entity of occupation.

Abbas laid a wreath and said a brief prayer at the grave of the iconic late Palestinian leader Yasser Arafat, who is buried within the presidential complex, later dedicating the UN victory to the former president's memory.

Abbas called the approval a milestone in Palestinian history, saying it was the achievement of Palestinians everywhere.

"Our people everywhere, raise your heads up high because you are Palestinians," he said. "You are stronger than the occupation... because you are Palestinians.

"You are stronger than the settlements because you are Palestinians."

While the Palestinians have expressed satisfaction and joy over the success of the bid, Washington has warned it could withhold funds to the already cash-strapped Palestinian Authority, as the Zionist entity declared Sunday it would not transfer millions of dollars it collects in tax funds for the Palestinians in response to the UN bid.

Also on Friday, the occupation authority revealed plans to build 3,000 settler homes in east Jerusalem and the West Bank in response to what it called ‘a provocative bid.’