DOHA, May 28 (Ali Sawafta/Reuters) - The Arab League decided on Saturday to seek full U.N. membership for a Palestinian state in the Gaza Strip and the West Bank, with East Jerusalem as its capital, ignoring opposition from the United States and Israel.

The Arab League's peace process committee, meeting in Doha, said it would request membership for the state of Palestine at the U.N. General Assembly's meeting in New York in September.

The committee decided to go to the United Nations to request full membership for Palestine on the 1967 borders, with East Jerusalem as its capital, it said in a statement.

The 1967 borders refer to Israel's frontiers as they stood on the eve of the 1967 Middle East war in which it captured the Gaza Strip from Egypt and the West Bank, including East Jerusalem, from Jordan.

The Palestinian leadership began peace talks with Israel nearly two decades ago with the aim of founding a state alongside Israel in the West Bank and the Gaza Strip.

Israel says that peace talks and an agreement are the only way for the Palestinians to achieve their goal of nationhood.

But with the peace process at a standstill, the Palestinian leadership has been seeking new ways to advance their cause. Palestinian President Mahmoud Abbas opposes the use of violence.

The Arab League's U.N. move looks set to fail because of the opposition of the United States, which has veto power in the Security Council. But Israel fears the maneuvering will leave them looking vulnerable on the diplomatic front.

U.S. President Barack Obama, in a May 19 speech, condemned what he described as symbolic actions to isolate Israel at the United Nations, a reference to the Palestinians' plan to push for recognition at the September meeting.

The Palestinians currently have the status of U.N. observers without voting rights.

NO COMMON GROUND

The Doha meeting had been convened in the wake of major Middle East policy speeches in Washington by Obama and Israeli Prime Minister Benjamin Netanyahu.

Netanyahu had said in a speech to the U.S. Congress he was ready to make painful concessions for peace, saying he was ready to give up parts of what he called the ancestral Jewish homeland -- a reference to the West Bank.

The Palestinians said Netanyahu's ideas for peace had put more obstacles in the path of an already moribund peace process.

Abbas, in his opening remarks to the Doha meeting, said there were no shared foundations for peace talks with Netanyahu and seeking U.N. recognition was his only option.

We see from the conditions that Netanyahu laid out that there are no shared foundations ... for negotiations. Our fundamental option is to go to the United Nations, he said.

He expressed fear that the step would lead some states to try to impose a siege upon us, though he did not say to which governments he was referring. We hope that there will be a safety net from the Arab states, he said.

The Palestinian Authority (PA) headed by Abbas is dependent on financial support from international donors including the United States and the European Union.

It also relies on customs duties collected on its behalf by Israel, which triggered a financial crisis for the PA earlier this month when the Israeli government temporarily withheld the funds following a reconciliation deal between the rival Fateh and Hamas groups.

U.S.-brokered talks between the Palestinians and Israel broke down last September in a dispute over continued Jewish settlement building in the occupied West Bank.

In these circumstances, it seems better to me that we freeze discussion of the peace process until there is a partner ready for peace, said Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani, who was chairing the meeting.

Arab League Secretary General Amr Moussa, a leading candidate for the Egyptian presidency, told Reuters that Netanyahu had presented nothing but a series of no's in his speech to the U.S. Congress.

The sound path is going to the United Nations and political struggle, Moussa said. I believe that negotiations have become futile in light of all of these nos. What will you negotiate on?

(Writing by Tom Perry; Editing by Louise Ireland and Andrew Dobbie)