Sweden's new Prime Minister Stefan Lofven said on Friday that his country will recognize the state of Palestine, making it the first major European country to take the step.
The UN general assembly gave de facto recognition to the sovereign state of Palestine in 2012, but the European Union and most allied countries are yet to give official recognition. The new centre-left Swedish government will be the first to make it official.
"The conflict between Israel and Palestine can only be solved with a two-state solution, negotiated in accordance with international law," Lofven said during his inaugural address in parliament.
"A two-state solution requires mutual recognition and a will to peaceful co-existence. Sweden will therefore recognize the state of Palestine."
With its reputation as an honest broker in international affairs and with an influential voice in EU foreign policy, the decision may well make other countries sit up and pay attention at a time when the Palestinians are threatening unilateral moves towards statehood.
The United States, predictably, was prompt to call the move to recognise Palestine "premature".
"We certainly support Palestinian statehood, but it can only come through a negotiated outcome, a resolution of final status issues and mutual recognitions by both parties," State Department spokeswoman Jen Psaki told reporters in Washington.
There is also likely to be strong criticism of Sweden from Israel along with the United States and the EU, which maintain that an independent Palestinian state should only emerge through a negotiated process – though, commentators ask, how such a process can be started with an intransigent Israel is obscure.
Within the EU, some countries, such as Hungary, Poland and Slovakia recognize Palestine, but they have done so long before they joined the 28-member bloc.
If the centre-left government fulfils its plans, Sweden would be the first country to recognise Palestine while being a member of the European Union.
The Social Democrats and Greens hold a minority of seats in parliament, and the incoming centre-left government is likely to be one of Sweden's weakest for decades.
The former centre-right government would not recognise Palestine as the Palestinian authorities did not control their territory.
The Palestinians want an independent state in the West Bank and Gaza, with its capital in East Jerusalem. While Gaza's boundaries are clearly defined, the precise territory of what would constitute Palestine in the West Bank and East Jerusalem will only be determined through negotiations with Israel on a two-state solution, negotiations which are currently suspended.