The Palestine National Council, the supreme authority of the Palestine Liberation Organization, convened in Algiers and declared the establishment of a Palestinian state on November 15, 1988. The PNC, parliament-in-exile of the dispersed Palestinians, sought legitimacy for the new independent state on the basis of United Nations General Assembly Resolution 181, which had endorsed the partition of Palestine on November 29, 1947. At that time, all the Arab states holding UN membership refused to accept the partition and eventually resorted to war in an effort to destroy Israel. The PNC itself, after its formation many years later, labeled the UN resolution 181 'null and void'. At the Algiers session, the Palestinians also made it clear that they renounced the age-long policy of armed struggle against the Zionist state and implicitly recognized Israel by accepting United Nations Security Council Resolution 242. Their flexible stance was applauded by most Arab and Afro-Asian countries. Within a fortnight, the PLO-led state was recognized by more than fifty countries. Despite its moderated stance, the PLO's effort was not appreciated by the superpowers that have dominated war and peace in the Middle East. The Soviet Union appraised the proclamation of independence but declined to recognize the new state because it has no firm boundaries. The United States of America abruptly changed its long-held posture requiring the enforcement of resolution 242 as an essential condition for peace in this region and rejected the proclamation of independence as a unilateral act. US President Ronald Regan later issued an instruction to have talks with the PLO. This, however, does not mean diplomatic recognition of the fledging State of Palestine. A national unity government of the Likud and Labor parties came to power in Israel seven weeks after the general election held on November 1, 1988. As one of the preconditions for a coalition between the rivals, both parties agreed on the establishment of new settlements in the occupied terr