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Canadian Foreign Minister John <strong>Baird</strong> addresses the United Nations Generally Assembly at UN Headquarters, in New York, November 29, 2012. Palestinian President Mahmoud Abbas appealed to the U.N. General Assembly to recognize Palestinian statehood by supporting a resolution to upgrade the U.N. observer status of the Palestinian Authority from "entity" to "non-member state." REUTERS/Chip East (UNITED STATES - Tags: POLITICS)CHIP EAST/Reuters

Foreign Affairs Minister John Baird is ruling out closing the Palestinian delegation in Ottawa in retaliation for their move to obtain "observer state" status at the UN.

And he suggested in a television interview that the Harper government's reaction will stop short of completely cutting off aid to the Palestinian Authority.

The Palestinian Authority won a lopsided victory Thursday in its bid for "non-member observer state" status at the UN, 138 to 9, with 41 abstentions. Canada was one of the nine that voted against, and Mr. Baird called the result "utterly regrettable."

Mr. Baird announced Friday morning that he is temporarily recalling Canadian ambassadors to the UN and the Middle East to consult them on their next steps, and reviewing Canada's relationship with the Palestinian Authority. But in an interview with CBC News, Mr. Baird said the Canadian reaction "will be responsible and will be deliberate."

Before the vote, Canada had warned of potential retaliatory steps against the Palestinians – including private warnings to Palestinian representatives that it might close their delegation in Ottawa.

On Friday, however, Mr. Baird ruled out that step: "We're not, obviously, looking at breaking off relations with the Palestinian Authority," he said.

He also said that he was impressed with the results from Canadian aid to the West Bank – a suggestion that Ottawa will not cut it off completely. Canada has provided $300-million in aid over the past five years. International Co-operation Minister Julian Fantino "will look at where Canada goes from here" regarding aid, Mr. Baird said.

However, Mr. Baird's warning of retaliation has already provoked a stark response from the Palestinian Authority, whose chief negotiator said Canada has "disqualified" itself from any future role in the Middle East peace process with its vitriolic opposition to upgraded UN status for Palestinians.

Chief Palestinian negotiator Saeb Erekat said that Canadian threats of reprisals and Mr. Baird's decision to personally campaign against the Palestinian resolution at the UN have ruled Ottawa out of a future role.

"I believe this government is more Israeli than the Israelis, more settler than the settlers," he said in an interview with The Globe and Mail. "I think they have disqualified themselves from playing any role in the Middle East peace process."

In particular, he said, Canada is no longer fit for its long-standing role as the so-called "gavel-holder" of the Refugee Working Group – a post that makes Canada the chair of international discussions on Palestinian refugee issues.