In a new treaty, the Vatican switched its diplomatic recognition from the Palestinian Liberation Organization to the state of Palestine. Palestinian officials celebrated the decision.

"We are indeed extremely encouraged by the Vatican recognition of the state of Palestine. We also see this as a very positive development, not just politically but in moral terms, human terms, in legal terms and it prepares for a whole new era in which Palestine will be seen by the whole world as a state," senior Palestinian official Hanan Ashrawi said.

Israeli sources told CBN News they believe the Vatican's decision will not lead the Palestinian Authority back to the negotiating table or promote the peace process. They plan to study the agreement and decide what possible steps to take.

Other groups like the Zionist Organization of America criticized the decision.

"Because what they are instructing the Palestinians is that they can accomplish their ends by being in violation of accords by pursuing unilateral accords as opposes to bilateral negotiations," Jeff Daube, with the Zionist Organization of America, said.

Some say the historic diplomatic move puts the Vatican and Pope Francis in the position of supporting a corrupt and terrorist entity.

Palestinian Authority President Mahmoud Abbas is in the tenth year of a four-year term and he presides over a unity government that includes Hamas in the Gaza Strip, a terror organization sworn to Israel's destruction.

The Palestinian Authority also sees Jerusalem as its future capital. That means most all of Jewish and Christian holy sites in the city would be in the hands of a Muslim Palestinian state.

The Vatican's decision also adds to the diplomatic momentum to recognize a Palestinian state. The U.N. Security Council looks to be the next forum soon when France is expected to introduce a resolution to recognize a Palestinian state.

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