The suggestion from the organisation's Security Council would mean the state existing side-by-side with Israel.
The UN also called for an immediate ceasefire in the 17-month fighting between the two sides and said peace talks must restart.
The plan is one way which might stop the fighting in the troubled region.
But the violence in the area is continuing as three Palestinians and an Italian journalist were reported to have died in fighting in Ramallah on Wednesday.
Ramallah is the Palestinian's main West Bank city and Israeli troops and tanks have moved into the area.