The Palestinian move at the United Nations came as the European parliament overwhelmingly backed recognition of a Palestinian state, the latest assembly in Europe to adopt a motion to that end.
Palestinian foreign minister Riyad al-Malki said the draft would be submitted to the Security Council after the Palestinians agreed with France on a merged text.
Arab ambassadors were set to meet at the United Nations at 1630 GMT to endorse the text and formally decide on whether Jordan, a Security Council member, will submit the measure.
The new text would set a two-year deadline for wrapping up negotiations on a final agreement that would provide for a new Palestinian state with Jerusalem as the shared capital.
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No firm deadline on an ending the Israeli occupation would be included but the resolution would call for a phased withdrawal of Israeli security forces over an agreed transition period.
"It will be presented to the Security Council as a blueprint, and could be put to a vote 24 hours after that," he added.
UN diplomats however cautioned that action may not be imminent.
"We are having a meeting at 11:30 with the Arab Group to discuss and we will see how it goes," Jordan's UN Ambassador Dina Kawar told reporters.
France was also planning to meet with Jordan and the United States later in the day.