VATICAN CITY -- The Vatican officially recognized the state of Palestine in a new treaty finalized yesterday, immediately sparking Israeli ire and accusations that the move hurt peace prospects.

The treaty, which concerns the activities of the Catholic Church in Palestinian territory, is both deeply symbolic and makes explicit that the Holy See has switched its diplomatic recognition from the Palestine Liberation Organization to the state of Palestine.

The Vatican had welcomed the decision by the UN General Assembly in 2012 to recognize a Palestinian state and had referred to the Palestine state since. But the treaty is the first legal document negotiated between the Holy See and the Palestinian state, giving the Vatican's former signs of recognition an unambiguous confirmation in a formal, bilateral treaty.

"Yes, it's a recognition that the state exists," said the Vatican spokesman, the Rev. Federico Lombardi.

The Israeli Foreign Ministry said it was "disappointed." "This move does not promote the peace process and distances the Palestinian leadership from returning to direct and bilateral negotiations," the ministry said in a text message.

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The United States and Israel oppose recognition, arguing that it undermines U.S.-led efforts to negotiate an Israeli-Palestinian deal on the terms of Palestinian statehood. Most countries in Western Europe have held off on recognition, but some have hinted that their position could change if peace efforts remain deadlocked.

The treaty was finalized days before Palestinian President Mahmoud Abbas visits Pope Francis at the Vatican. Abbas is heading to Rome to attend Francis' canonization Sunday of two new saints from the Holy Land.

"This is a very important recognition as the Vatican has a very important political status that stems from its spiritual status," said Abbas' senior aide, Nabil Shaath.