Palestinian President Mahmoud Abbas watches as the Palestinian flag is raised at the UNESCO headquarters in Paris.
The ceremony follows an October vote in which Palestinians were given membership of the United Nations' cultural agency.
The vote was a diplomatic victory for Abbas, who is pushing for recognition of the Palestinian state at the UN, a move opposed by Israel and the U.S.
Peace talks froze a year ago over the continued expansion of Jewish settlements in the West Bank and East Jerusalem.
Since the UNESCO vote, Israel has pressed ahead with new settlements, and the Palestinians have refused calls to renew talks whilst the settlement programme continues.
Abbas was also due to meet French President Nicolas Sarkozy on Tuesday.
Nick Rowlands, Reuters.