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From left, President Shimon Peres of Israel, Pope Francis and President Mahmoud Abbas of the Palestinian Authority in the Vatican gardens last year. CreditFranco Origlia/Getty Images 
ROME — The Vatican said Wednesday that it had concluded a treaty to recognize Palestinianstatehood, a symbolic but significant step welcomed by Palestinians but upsetting to the Israeli government.
Formal recognition of a Palestinian state by the Vatican, which has deep religious interests in the Israeli-occupied Palestinian territories that include Christian holy sites, lends a powerful signal of moral authority and legitimacy to the efforts by the Palestinian Authority’s president, Mahmoud Abbas, to achieve statehood despite the long paralyzed Israeli-Palestinian peace process.
Israel has grown increasingly alarmed about the increased international acceptance of Palestine as a state since the United Nations upgraded the Palestinian delegation’s status in 2012 to that of a nonmember observer state. A number of European countries have also signaled their acceptance of Palestinian statehood.
statement from a joint commission of Vatican and Palestinian diplomatic officials, posted on the Vatican news website, said “the work of the commission on the text of the agreement has been concluded,” and that it would be submitted for formal approval and for signing “in the near future.”
Hanna Amireh, head of a Palestinian committee on church affairs, said the treaty was a broad one regarding the Vatican’s interests in the West Bank, East Jerusalem and the Gaza Strip, including the standing of churches and church courts and taxes on church charities, institutions and lands, as well as other cultural and diplomatic matters. He said it had been under negotiation for about a year.
“The Vatican is the spiritual capital of the Catholics, and they are recognizing Palestine, that’s the chief importance,” said Mr. Amireh, who is also a member of the Palestine Liberation Organization’s executive committee. The move counters an image of Palestinians as militants or terrorists, he added, as a “recognition of the Palestinian character that has a clear message for coexistence and peace.”
A senior Israeli Foreign Ministry official, who spoke on the condition of anonymity under diplomatic protocol, said Israel was “disappointed to hear” about the Vatican’s use of the term “state” in its new treaty.
”This step does not advance the peace process and pushes the Palestinian leadership further away from returning to a direct and bilateral negotiation,” the official said in a statement, echoing Israel’s reactions to a series of recent parliamentary resolutions on Palestinian statehood in European nations. “Israel will study the agreement and consider its next steps accordingly.”
Pope Francis, the leader of the world’s 1 billion Catholics, has long signaled his wish for a Palestinian state. For the past year, the Vatican had informally referred to the country as “state of Palestine,” in its yearbook as well as in its program for Francis’ 2014 visit to the Holy Land.
During that visit, Francis gave an additional boost to Palestinian sovereignty by flying directly to Bethlehem from Amman, Jordan, rather than stopping first in Israel as his predecessors had done. Francis later hosted the Palestinian and Israeli presidents in a prayer for peace.
It is not the first time Francis has shown a willingness to offend political sensitivities in the name of doing what he thinks is right. Exactly a month ago, for example, the pope angered the Turkish government by calling the 1915 slaughter of an estimated 1.5 million Armenians by Ottoman Turks a genocide. Turkey recalled its Vatican ambassador in response.
A Palestinian spokesman, Xavier Abu Eid, said 135 nations now recognize Palestine as a state.
Jamal Khader, rector of the Latin Patriarchate Seminary in Jerusalem, said that Pope Francis and his secretary of state, Cardinal Pietro Parolin, had worked closely with the Palestinians and noted that the treaty was finalized just before the canonization of two Palestinian nuns — the first Arabic-speaking saints — scheduled for Sunday. Mr. Abbas is scheduled to attend that ceremony.
Cardinal Parolin “wants to help create a new reality in Palestine here — in the diplomatic way of the Vatican, of course,” Father Khader said in an interview.
“The wider Arab world often thinks that it’s a Christian West against a Muslim East, so this is an important step from the Catholic Church to show that, no, it is standing with the rights of Palestinians, and with the right to a state of Palestine,” he said.
Neville Y. Lamdan, a former Israeli ambassador to the Holy See, said the main importance of the Vatican recognition of Palestinian statehood was the “moral authority and weight” it confers.
“The real question is why the Vatican came round to this step,” Mr. Lamdan said. “It certainly would be a very deliberate and carefully weighed decision; there’s nothing accidental about it.”
Rabbi David Rosen, international director of interreligious affairs for the American Jewish Committee, downplayed the significance of the term “state” in the new treaty, noting that Francis had already used it himself.
“I don’t think it was meant to be something dramatic,” Rabbi Rosen said. “Francis deeply cares about the peoples of this land, and he would very much like to see a peaceful reconciliation, but I don’t see he’s made any changes in terms of Vatican policy.”
As for Israel’s relationship with the Vatican, which officially began with a similar agreement in 1993, Rabbi Rosen said it was “far too strong for it to be hurt by a designation or a terminology.”