Al Quds al Arabi reports that there is concern among Arab analysts about the sudden US move to symbolically upgrade the status of the PLO mission in Washington.
Their fear is that this was a precursor for the Obama administration moving the US embassy to Jerusalem, a move long favored by Congress and that would give President Obama a big boost among Jews in the US.
Since 1995, every US president has issued a waiver on the Jerusalem Embassy Act of Congress every six months.
I believe that the next time this comes up is in the end of November.
The Obama administration has excised the wording that the Bush administration had inserted in every waiver, which stated "My Administration remains committed to beginning the process of moving our embassy to Jerusalem."
I don't think that the US would consider moving the embassy unless Israel had already abandoned parts of the city.