Palestinian President Mahmoud Abbas has asked his West Bank-based government to prepare for replacing the words "Palestinian Authority" with "State of Palestine".
The order by Abbas on Sunday applies to all public documents, but Palestinian officials said on Monday they will not rush to issue new passports and ID cards to avoid confrontation with Israel.
Hassan Alawi, a deputy interior minister in the Palestinian Authority, said documents and stationery with the new emblem will be ready within two months, but all documents Palestinians need in their dealings with Israel will only be changed if there is a further decision by Abbas.
Mark Regev, an Israeli government spokesman, dismissed the name change as insignificant, but declined comment on whether Israel would retaliate in any way.
"Whether the changes are really implemented is unsure because of the political situation right now," said Al Jazeera's Jane Ferguson, reporting from Jerusalem. "But the move is to regain momentum after the UN vote."
In late November, Abbas won UN recognition of a state of Palestine in the occupied West Bank, Gaza and East Jerusalem, overriding Israeli objections to the largely symbolic step.
The UN bid gave the Palestinians new diplomatic leverage by affirming the borders of a future state of Palestine in lands Israel captured in 1967, but changed little in the day-to-day lives of Palestinians.
Set up two decades ago as part of interim peace deals with Israel, the self-rule government was meant to be temporary and replaced by a fully functioning state of Palestine - to be established through negotiations with Israel.
However, those talks repeatedly broke down, and for the past four years the two sides have been unable to agree on the terms of renewing the negotiations.
In an apparent response to the UN move, Israel in December halted its monthly transfer of about $100m in tax rebates it collects on behalf of the Palestinians. That sum amounts to about one-third of the monthly operating costs of the Palestinian Authority, which now only takes in about $50m a month in revenues.
Israel has said it used the withheld money to settle Palestinian Authority debt to Israeli companies, and it is not clear whether the transfers will resume.
As a result, the Palestinian Authority is on the "verge of being completely incapacitated", Prime Minister Salam Fayyad warned on Sunday.
In an interview with the Associated Press news agency, Fayyad attributed his government's "extreme jeopardy" and unprecedented financial crisis to failure by Arab countries to send hundreds of millions of dollars in promised aid.
The 22-nation Arab League has not kept a promise to make up for the funds Israel withholds, Fayyad said.
The cash crunch has gradually worsened in recent years, and the Palestinian Authority now has reached the point of not being able to pay the salaries of about 150,000 government employees, Fayyad said.
While European countries have kept their aid commitments, about $200m in US aid was held up by Congress last year - a sum President Barack Obama's administration hopes to deliver to the Palestinians this year, along with an additional $250m in aid.
Source: Al Jazeera and agencies