OTTAWA - The federal government will not cut diplomatic relations with the Palestinians in response to their newly won recognition from the United Nations, but future aid funding could be on the chopping block.

Canada's $300 million in aid spending to the Palestinians is under review, as Foreign Affairs Minister John Baird readies himself for meetings in Ottawa next week with his senior diplomats from Israel, the West Bank and the UN missions in New York and Geneva.

Baird temporarily recalled the envoys Friday to get their views on the implications of the UN General Assembly vote which granted status to the Palestinians as a non-member observer state.

The Harper government has made it clear, both privately and publicly, that the Palestinians would face repercussions for their pursuit of statehood.

The two most obvious options are severing diplomatic ties and suspending aid contributions to the Palestinian Authority.

"Canada is deeply disappointed but not surprised by yesterday’s result at the United Nations General Assembly," Baird said in a statement. "Canada will now review the full range of its bilateral relationship with the Palestinian Authority."

The Harper government has a track record using both diplomatic tools. It recently shuttered the embassies of Syria and Iran, sending their diplomats packing and severing ties. One of its first foreign policy acts after winning power six years ago was to freeze its $300-million contribution to the Palestinians after the surprising election win by the political wing of terrorist organization Hamas in Gaza.

Despite Friday's diplomatic recall, sources say Baird isn't planning to tell the Palestinian delegation in Ottawa to abandon its mission.

"I can tell you we have no intention at this point of cutting off relations or sending Palestinian diplomats home," said a senior government official, who would only speak on condition of anonymity.

Baird himself echoed that view in a televised interview with the CBC.

But Canada's five-year, $300-million commitment formally expires early next year, and is therefore under review.

The Palestinian aid money goes towards strengthening its justice system, private sector economic development, and health and education assistance.

Said Hamad, the chief Palestinian representative to Canada, issued a statement late Friday that offered an olive branch to Canada, Israel and the other countries that voted against it.

"The Palestinian Liberation Organization fully respects the votes cast by all member states in the General Assembly, irrespective of whether they were in favour of, abstained from, or were cast against the resolution," the statement said.

"We will continue to engage all states in order to advance the objective of an independent Palestinian state, living in peace and security side by side with Israel."

Hamad also said the UN recognition "does not delegitimize any other state."

While the government ponders its next moves towards the Palestinians, the aftermath of Thursday's historic vote left Canada virtually isolated on the world stage.

Canada was joined by Israel and its key ally, the United States, and was among only nine of the UN's 193 member countries to vote against the Palestinians. Forty-one countries abstained.

The rest of Canada's voting bloc was rounded out by the Czech Republic, Marshall Islands, Micronesia, Nauru, Palau and Panama.

But the widening gap between Canada and the Muslim world was graphically illustrated when Baird scored a prime speaking slot at Thursday's general assembly vote, delivering a forceful speech — and a No vote — on Canada's behalf.

Baird was sandwiched between the only two other foreign ministers to get speaking time prior to the vote — his counterparts from Turkey and Indonesia, two key Muslim allies, whose ministers recently visited Ottawa.

Baird hosted Indonesia's Marty Natalegawa in August and Turkey's Ahmet Davutoglu in September. Both countries have been identified as key allies in the Baird's internal foreign policy review.

Unlike Baird, Natalegawa and Davutoglu offered passionate defences of Palestine's right to statehood and spoke of its long suffering people.

"The time has come for the international community to set things right. No longer can the world turn a blind eye to the long sufferings of the Palestinian people, the denial of the basic human rights and their fundamental freedoms, the obstruction of their rights to self determination and to independence," said Natalegawa, who noted that Indonesia — the world's most populous Muslim country — was co-sponsoring the Palestinian resolution.

Natalegawa also referred to the "enormous barriers erected by the occupying power" in the Palestinian territories.

In sharp disagreement with Baird, Davutoglu said the recognition would spark the peace process, not hinder it. He said Gaza was a place where "thousands of people live through an inhumane blockade in an open prison."

Baird is among those who are concerned that the Palestinians will use their new status to file war crimes charges against Israel in the International Criminal Court.

U.S. lawmakers have warned they will table legislation that would deny Palestinians future funding if they go that route.

Baird has expressed legitimate concerns about the impact of the Palestinians' elevated status, said foreign policy expert Fen Hampson, head of the global security program at the Centre for International Governance Innovation in Waterloo, Ont.

But he warned against overreacting.

"We should be careful about wielding a heavy stick to penalize the Palestinians on humanitarian aid and development assistance for their actions," he added.

"We should not go out of our way to alienate our friends in the Muslim world who are more sympathetic to the plight of Palestinians by being too strident on this issue. At the end of the day our influence on the Middle East peace process, which itself is moribund but one day may be revived, depends on our ability and willingness to talk to both sides."

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  • China: In Favor

    China's foreign minister reaffirmed support for Palestinian aspirations at the U.N. during a meeting last Friday with a Palestinian envoy. <em>Caption: Bassam al-Salhi (L), the general secretary of the Palestinian People's Party, shakes hands with Chinese Foreign Minister Yang Jiechi (R) during their meeting at the Foreign Ministry building in Beijing on November 23, 2012. (MARK RALSTON/AFP/Getty Images)</em>

  • France: In Favor

    French Foreign Minister Laurent Fabius made the announcement before parliament. "In any case, it's only through negotiations – that we ask for without conditions and immediately between the two sides – that we will be able to reach the realization of a Palestinian state," Fabius said Tuesday. <em>Caption: French president Francois Hollande (L) welcomes Palestinian president Mahmud Abbas for a meeting at the Elysee presidential Palace in Paris on July 6, 2012. (BERTRAND GUAY/AFP/Getty Images)</em>

  • Austria: In Favor

    Martin Weiss, Austria's foreign ministry spokesman, said the country decided to vote for the resolution after it became clear there would be no common EU position. <em>Caption: Palestinian president Mahmud Abbas (L) shakes hands with Austrian Chancellor Werner Faymann on November 28, 2011 in Vienna. (DIETER NAGL/AFP/Getty Images)</em>

  • India: In Favor

    <em>Caption: Indian Prime Minister Manmohan Singh (R) shakes hands with Palestinian president Mahmud Abbas (L) after a joint press statement in New Delhi on September 11, 2012. (RAVEENDRAN/AFP/GettyImages)</em>

  • Russia: Probably In Favor

    Russia supported Palestinian membership in the U.N. cultural agency, UNESCO. The Russian Foreign Ministry said the country "believes that the Palestinians have the right for such a move" but it added "we hope that the Palestinian leadership has well calculated possible consequences of such action." <em>In this handout image supplied by the Palestinian Press Office (PPO) Mahmoud Abbas (R), the President of Palestinian authority and Vladimir Putin, the President of Russian Federation, speak at the Presidential Palace, on June 26, 2012 in Bethlehem, West Bank. (PPO via Getty Images)</em>

  • Norway: In Favor

    <em>Caption: RAMALLAH, WEST BANK - JANUARY 12: Palestinian President Mahmoud Abbas (R) meets Norway's Foreign Minister Jonas Gahr Stoere during a meeting on January 12, 2012 in Ramallah, West Bank. (Mohamad Torokman - Pool/Getty Images)</em>

  • Denmark: In Favor

    <em>Caption: In this handout image supplied by the Palestinian President's Office (PPO), Palestinian Authority President Mahmoud Abbas meets with Prime Minister of Denmark Helle Thorning-Schmidt on September 26, 2012 in New York City. (Thaer Ghanaim-PPO/Getty Images)</em>

  • Switzerland: In Favor

    The Swiss government called a change in status "both constructive and pragmatic." <em>Caption: Swiss President Eveline Widmer-Schlumpf (R) speaks with Palestinian President Mahmud Abbas during an official visit to Switzerland on November 15, 2012 in Bern. (FABRICE COFFRINI/AFP/Getty Images)</em>

  • Spain: In Favor

    <em>Caption: Madrid, SPAIN: Leader of opposition Popular Party (Partido Popular) Mariano Rajoy (R) shakes hands with Palestinian President Mahmud Abbas during his overnight trip to Madrid, 27 January 2007. (PIERRE-PHILIPPE MARCOU/AFP/Getty Images)</em>

  • United States: Opposed

    <em>Caption: In this handout provided by U.S. Embassy Tel Aviv, U.S. Secretary of State Hillary Clinton meets with Israel's Prime Minister Benjamin Netanyahu (R) on November 21, 2012 in Jerusalem, Israel. (Stern/U.S. Embassy Tel Aviv via Getty Images)</em>

  • Canada: Opposed

    Canada is a staunch ally of Israel. Rick Roth, a spokesman for Canada's foreign minister, said any two-state solution must be negotiated and mutually agreed upon by both states. Roth said any unilateral action is ultimately unhelpful. <em>Caption: In this handout photo from the Israeli Government Press Office (GPO), Israeli Prime Minister Benjamin Netanyahu (L) meets with Canadian Prime Minister Stephen Harper March 2, 2012 in Ottawa, Ontario, Canada. (Amos Ben Gershom/GPO via Getty Images)</em>

  • Germany: Probably Opposed

    It's "very certain that Germany will not vote for such a resolution," said Chancellor Angela Merkel's spokesman, Steffen Seibert. Officials aren't saying whether that will translate into a no vote or an abstention. <em>Caption: German Chancellor Angela Merkel (R) welcomes Israeli Prime Minister Benjamin Netanyahu in front of the Chancellery in Berlin April 7, 2011. (FABRIZIO BENSCH/AFP/Getty Images)</em>

  • Netherlands: Probably Opposed

    "Lasting peace in the region can only be reached if Israel and the Palestinians return to the negotiating table to reach a final agreement over a two-state solution," according to a letter the foreign minister sent to parliament this week <em>Caption: Israel's Prime Minister Benjamin Netanyahu (L) listens to Dutch Queen Beatrix during a meeting at Huis ten Bosch Royal Palace in The Hague, The Netherlands, on January 19, 2012. (ROBIN UTRECHT/AFP/Getty Images)</em>

  • Britain: Possibly Abstain

    The foreign secretary said Britain could support the measure only if there were a clear commitment by the Palestinians to return immediately and unconditionally to negotiations with Israel. "While there is no question of the United Kingdom voting against the resolution, in order to vote for it we would need certain assurances or amendments," said William Hague. <em>Caption: Britain's Foreign Secretary William Hague arrives at a Range Rover dealership in Berlin October 23, 2012 to unveil a new Range Rover model. (JOHN MACDOUGALL/AFP/Getty Images)</em>

  • Australia: Abstain

    According to Prime Minister Julia Gillard. Her government is divided on the issue, but Gillard told Parliament "bipartisan policy across the major parties in this parliament to support Israel, to support peace in the Middle East, to support two states in the Middle East." <em>Caption: Australian Prime Minister Julia Gillard attends the naming of Queen Elizabeth Terrace at Parkes Place on November 10, 2012 in Canberra, Australia. (Chris Jackson/Getty Images)</em>