Optimally, both sides would reach a mutually acceptable accord. Without the core needs of both parties being accommodated, the terms will not be sustainable and would be viewed by them as illegitimate. Alternatives to a negotiated outcome i.e., unilateral measures and/or allowing the evolution of events to define a settlement, would probably contain fewer net mutual benefits. In such circumstances, power would play a larger role.
By ratifying the Palestinian demands, the UN would merely circumvent the negotiating process. In doing so, the UN would surrender any constructive role it could play as an intermediary or mediator on account of its becoming the agent of a single party to the dispute.
It would also lose credibility with respect to calling for a diplomatic solution after its having bypassed diplomacy. In contradiction to its Charter's call for Member states to settle disputes by "peaceful means," it would attempt to assume full jurisdiction for the settling of disputes. That development would represent a serious encroachment on the sovereign jurisdiction of nation-states. As a result, it would more than likely nurture intransigence, especially if the UN lacks the physical means to impose its solutions.
No state can grant outsiders carte blanche to intervene in their affairs, particularly when their critical interests are involved. Almost certainly, Israel would reject the terms of such a resolution, both on grounds of its interests in the dispute and on the principle of preserving its sovereign jurisdiction. And if, by the UN's actions, the Israeli-Palestinian dispute is transformed into one in which sovereign jurisdiction becomes a defining issue, that would greatly complicate an already complex dispute.
Finally, such a move would also establish yet another precedent whereby the UN tries to hold Israel to a separate standard than that for all other sovereign states. Certainly, the UN has made no moves to unilaterally settle the status of various disputes arising out of the breakup of the Soviet Union, disputes between India and Pakistan, disputes within China's boundaries e.g., Tibet, among others. IMO, those are matters properly left to the sovereign states to resolve, not the UN to dictate terms.
Should such a resolution reach the Security Council, I believe the Security Council should unanimously reject it (though I highly doubt such an outcome). At the same time, the U.S. should, and almost certainly will, veto it.
Now, if the UN wants to offer suggested terms to the parties (and it would have to address all final settlement issues) as a basis for settling the historic dispute, that would be a whole different matter. Well-considered suggestions can be constructive. Attempts at imposition won't be helpful, especially as the differences between the two parties are both deep and fundamental.
