UNITED NATIONS, July 3 (Louis Charbonneau/Reuters) - A dispute over whether the Palestinians should participate in an arms treaty drafting conference as an observer without voting rights - the status they have in the U.N. General Assembly - or as a state party with voting rights delayed the start of the conference by more than a day before being resolved, delegates said.


The Palestinian Authority's permanent observer to the United Nations, Riyad Mansour, told reporters on Tuesday that since the arms trade treaty negotiations are what he called an international conference of states, the Palestinians should be a full participant.

Last year the Palestinian Authority successfully obtained membership as a state party to the U.N. scientific and cultural agency UNESCO, which infuriated the United States and Israel. Because of Palestine's recognition as a state by UNESCO, Mansour said, it should have the same status at the arms treaty talks.

The Holy See (Vatican) and Palestine feel that it is their right to participate as a state party to this conference, he said. Unfortunately there are others, few, who feel differently.

The Vatican has the status of a non-member observer state in U.N. General Assembly, a status the Palestinians have repeatedly suggested they might seek.

Delegates and non-governmental organizations have said that if there was a vote on whether the Palestinians should participate as a state with voting rights at the arms treaty negotiations, the United States, Israel and other participants would walk out of the conference.

Without the United States, the world's biggest arms supplier, it would be hard to get a meaningful treaty out of this conference, a Latin American diplomat told Reuters on condition of anonymity.

In the end, the Palestinians and the Vatican delegation, which also wanted full participation rights, reluctantly accepted the right to sit at the front of the negotiating hall next to Argentina, but without the right to participate as states with voting rights in the consensus-based talks.

The U.S. delegation was pleased that a solution agreeable to all parties was reached that would allow the negotiations on the Arms Trade Treaty to begin, said Kurtis Cooper, a spokesman for the U.S. mission.

It is regrettable, however, that the limited time available to negotiate this treaty was reduced pending resolution of this unrelated issue.

One of the reasons this month's negotiations are taking place is that the United States, the world's biggest arms trader accounting for over 40 percent of global conventional arms transfers, reversed U.S. policy on the issue after Barack Obama became president and decided in 2009 to support a treaty.

However, U.S. officials say Washington insisted in February on having the ability to veto a weak treaty during this month's talks, if necessary. It also seeks to protect U.S. domestic rights to bear arms - a sensitive issue in the United States.

The other five top arms suppliers are Britain, China, France, Germany and Russia. (Reporting By Louis Charbonneau; Editing by Cynthia Osterman)