Palestinian Authority President Mahmoud Abbas has signed the Rome Statute in a bid to join the International Criminal Court(ICC).
Mr Abbas signed the founding treaty of the ICC at a meeting in Ramallah.
Correspondents say successful membership could see the Palestinians pursue Israel on war crimes charges.
The move follows the rejection of a UN Security Council resolution demanding an end to the Israeli occupation of the Palestinian territories by late 2017.
Eight members of the 15-strong Security Council voted for that resolution, while the US and Australia voted against.
The resolution, condemned by Israel as a "gimmick", needed the support of at least nine members in order to pass.
'Palestinian right' The Rome Statue was among some 20 international agreements signed by Mr Abbas at the meeting in Ramallah, in the West Bank. Signing up to the statute is seen as the first move to joining the ICC.
"We strongly believe that diplomacy, including accession to treaties and international organisations is a right for the Palestinian people," the Israeli newspaper Haaretz quoted Palestinian chief negotiator Saeb Erekat as saying.
Israeli Prime Minister Benjamin Netanyahu responded quickly, saying Israel would take "steps in response and defend Israel's soldiers".
He criticised Mr Abbas' unity government with Hamas, which he called "an avowed terrorist organisation which, like ISIS, carries out war crimes", Reuters reported.
Palestinian chances of joining the ICC were improved in 2012 after the UN General Assembly voted to upgrade their status to that of a "non-member observer state" in November of that year.
However, membership is not guaranteed.
Analysts say signing the Rome Statue could stir up tensions with the US and other major donors to the Palestinian Authority.
Based in The Hague, the ICC can prosecute individuals accused of genocide, crimes against humanity and war crimes committed since 1 July 2002, when the Rome Statute came into force.