BRASILIA, Dec 31 (Reuters) - Palestinian President Mahmoud Abbas thanked Brazil on Friday for recognizing his nation's statehood with the first embassy in the Americas and said other countries were following suit.

Brazil became the first of several South American countries in recent weeks to recognize a Palestine state along pre-1967 borders.

Since then Argentina, Uruguay, Bolivia and Ecuador have done the same. Chile, Mexico, Peru and Nicaragua are reported to be considering recognition.

Israel says the moves are seriously harmful to the Middle East peace process and Washington has called them premature.

We thank Brazil for its support in the construction of a Palestine state. This favor we will never forget, said Abbas after laying the cornerstone in Brasilia for his nation's first embassy in the Western Hemisphere.

We see several countries following the example of Brazil in recognizing the Palestinian state, Abbas said before meeting with outgoing President Luiz Inacio Lula da Silva.

Palestinian authorities are hoping for a diplomatic domino effect to give international validity to their claim for a state in all of the West Bank and Gaza Strip, which Israel captured along with East Jerusalem in a 1967 war.

Direct peace talks revived by Washington in September after a year's suspension collapsed within weeks. A U.S. drive to keep the process alive via third-party talks is in limbo.

The Palestinians reject further negotiation with Israeli Prime Minister Benjamin Netanyahu until Jewish settlement of West Bank land is frozen and Netanyahu states clearly what size and shape of country he envisages agreeing to eventually.

Lula has raised eyebrows in some Western countries with his mediation efforts in the Middle East peace process. He also angered Washington earlier this year when he held talks with Mahmoud Ahmadinejad over Iran's nuclear program.

In a further sign of growing pro-Palestinian sentiment in South America, the regional trade bloc Mercosur signed a trade accord earlier this month with the Palestinian authority.

Bolivia broke ties with Jerusalem in 2009 after an Israeli attack on Palestinian territories.

Abbas will attend the swearing-in of Brazilian President-elect Dilma Rousseff on Saturday. (Reporting by Raymond Colitt; Editing by Eric Beech)