India was among the 138 nations in the 193-member body that voted in favour while nine countries opposed the resolution that sought upgrading the status of Palestinian Authority from 'entity' to 'non-member observer' state. Forty-one countries abstained from the voting which took place yesterday.
UN Secretary General Ban Ki-moon said "an important vote" has taken place in the General Assembly.
"Today's vote underscores the urgency of a resumption of meaningful negotiations. We must give new impetus to our collective efforts to ensure that an independent, sovereign, democratic, contiguous and viable State of Palestine lives side by side with a secure State of Israel," Ban said in his remarks after the votes were cast.
The symbolic vote signified the huge international backing for Palestine and came as a stinging defeat for Israel and the US.
The vote could enable Palestine to access bodies like the International Criminal Court in The Hague, which prosecutes people for genocide, war crimes and major human rights violations.
Some nations like the UK have said Palestine could use access to the ICC to complain about Israel. In his address to the General Assembly before the vote, Palestinian Authority President Mahmoud Abbas said the vote will "issue a birth certificate of the reality of the state of Palestine".
"...Our people have witnessed, and continue to witness, an unprecedented intensification of military assaults, the blockade, settlement activities and ethnic cleansing, particularly in occupied East Jerusalem, and mass arrests, attacks by settlers and other practices by which this Israeli occupation is becoming synonymous with an apartheid system of colonial occupation, which institutionalises the plague of racism and entrenches hatred and incitement," Abbas said.
"The moment has arrived for the world to say clearly: Enough of aggression, settlements and occupation," he said.
"We did not come here seeking to delegitimise a State established years ago, and that is Israel; rather we came to affirm the legitimacy of the State that must now achieve its independence and that is Palestine," Abbas told the Assembly before the vote.
The Palestinian Authority President said with the vote the world was being asked to undertake a significant step in the process of rectifying the "unprecedented historical injustice" inflicted on the Palestinian people since 1948.
"Your support for our endeavour today," he said, "will send a promising message to millions of Palestinians on the land of Palestine, in the refugee camps both in the homeland and the Diaspora, and to the prisoners struggling for freedom in Israel's prisons that justice is possible and that there is a reason to be hopeful and that the peoples of the world do not accept the continuation of the occupation."