Motion to raise the Palestinian flag in front of UN buildings has been overwhelmingly passed by 119 votes in the General Assembly. The resolution gives 20 days for the motion to be implemented.
Israel has strongly opposed the motion, and voted against along with the United States.
The successfully passed motion called for the flags of non-member observer states like the Palestinian territories to follow the flags of member states outside UN offices. That means the flag of the Vatican - another non-member observer state - will also be raised.
The Israeli officials had previously expressed dissatisfaction to the United Nations about Palestinian’s attempt to fly his country's flag together with full member states at the UN headquarters, calling it “another misuse of the UN by the Palestinian Authority.”
Ron Prosor, the Israel's ambassador to the UN wrote a letter of complaint to UN Secretary General Ban Ki-moon and this year's President of the 193-nation General Assembly, Sam Kutesa, about the Palestinian attempt to raise their flag.
"For 70 years the United Nations has raised only flags of full member states," Prosor said, adding that the Palestinians never held a single round of consultations on their resolution. He called it "another cynical misuse of the UN by the Palestinian Authority."
"Once again the Palestinians prefer to score easy and meaningless points at the UN, simply because they can," he said.
"It's time to unequivocally tell them: this is not the path to statehood, this is not the way for peace."
Riyad Mansour, the Palestinian representative to the UN said erecting the flag would be "another step" towards solidifying Palestinian statehood.
UK and 45 other nations abstained from the vote, many of which are members of the European Union. However France, Sweden, Italy, Spain, Ireland and Slovenia all voted in favour.
Samantha Power, the US ambassador to the UN, said the raising of the flag was "not an alternative to negotiations [between the Palestinians and Israel], and will not bring the parties closer to peace".
But the French ambassador, Francois Delattre, said the flag was "a powerful symbol, a glimmer of hope" for the Palestinians amid the breakdown of peace talks.
UN Secretary General Ban Ki-moon announced earlier this month that the a new ministerial meeting will be hosted in renewed efforts to end the Israeli-Palestinian conflict. The meeting is scheduled for September 30 during the annual high-level session of the General Assembly.
Peace talks have been stalled between Israel and Palestine since early 2014. Israeli Prime Minister Benjamin Netanyahu, and Palestinian President Mahmoud Abbas, have been unable to agree on ground rules for negotiations.
Backed by the international community, Abbas says the pre-1967 frontier, before Israel captured the West Bank, Gaza Strip and East Jerusalem, should be the starting point for talks on the borders of a future Palestinian state. Netanyahu fully rejects that, along with the ultraconservative Jewish parties like the Jewish Home.
Some 135 countries - many in Asia, Africa and Latin America - now recognise a Palestinian state.