Under Sarkozy France supported the Palestinian Authority’s bid for observer status at the UN, while not backing full membership, and in October 2011 Paris voted for the Palestinian state to be admitted to the UN's cultural arm, Unesco.
But, with the US working against the Palestinian bid, Hollande has warned of "risks" in supporting it.
“If there is a solution, France will look at it closely and adopt the best position possible, informing our Palestinian friends of any risks,” he said.
Palestinian President Mahmoud Abbas, who is to visit in the next few days, is set to put the bid to the UN General Assembly on 29 December, his second attempt to win the assembly's backing.
Earlier this month, during a visit to Paris by Israel’s Prime Minster Benjamin Netanyahu, Hollande called for Israel and Palestine to restart peace talks.
A simple majority is needed at the UN General Assembly vote next month but it would carry less weight without European support.
Nassif Hitti, Ambassador to the Arab League in Paris said a new status for Palestine would mean “no further talk of it being an occupied state”.
If a second bid proves unsuccessful, Palestinians could take their case to the International Criminal Court - a move America and Israel hope to avoid at all cost.