Nations of the world honored Yasser Arafat (search) as a head of state Thursday, with many joining the deceased leader's call for a quick transition to a Palestinian state living in peace with its neighbors.

Even though the Palestinians only have observer status at the United Nations (search), at Secretary-General Kofi Annan's request the General Assembly decided to accord Arafat the honors of a head of state because that's the way he was treated for many years by the 191-member world body, U.N. spokesman Fred Eckhard said.

As a result, the blue-and-white U.N. flag was flying at half-staff outside U.N. headquarters Thursday and the General Assembly (search) held a memorial tribute in the afternoon.

General Assembly President Jean Ping asked the diplomats and U.N. officials to observe a minute of silence. Almost all countries were represented including Israel and the United States.

Annan spoke first, urging the Palestinians and Israelis to work with the international community to find a peaceful settlement of their conflict.

"For nearly four decades, Yasser Arafat expressed and symbolized in his person the national aspirations of the Palestinian people," the secretary-general said.

Several speakers expressed anger at Israel's treatment of Arafat and the Palestinians, especially his last three years under virtual house arrest. Yet all looked forward to peace between the Israelis and Palestinians.

Sudan's deputy U.N. ambassador Omar Bashir Mohamed Manis, speaking for the Arab group, said Arafat "was able to sustain all forms of unjust treatment and torture and humiliation" and "the intransigence and the oppression of the occupation forces" because he believed in the cause of Palestinian statehood and pursued a peaceful settlement.