Sweden’s new government says it has recognised a Palestinian state, a move declared by the prime minister as a priority for the left-leaning minority coalition.
The EU member country has joined two other western European nations – Malta and Cyprus – which have officially recognised Palestine.
Foreign minister Margot Wallstrom said Sweden had decided on the move because the “criteria of international law” had been fulfilled, saying there is “a territory, a people and government”.
The EU has said that it would recognise a Palestinian state “when appropriate” and has urged that negotiations be resumed as soon as possible to achieve a two-state solution.
Earlier this month, MPs in the UK held a symbolic vote in favour of recognising Palestine as a state.
PM David Cameron said at the time that he looked forward to the day when the UK recognises the state of Palestine but insisted it will only happen when a peaceful two-state solution is achieved.
Ms Wallstrom said she hoped Sweden's ``excellent co-operation (with Israel) would continue'' and that the decision would be met ``in a constructive way''.
But Israel was quick to condemn the move. Foreign minister Avigdor Lieberman described it as “a miserable decision that strengthens the extremist elements and Palestinian rejectionism”.
“It’s a shame that the government of Sweden chose to take a declarative step that only causes harm,” he added.
The move by Sweden comes during increased tensions between Arabs and Jews over Israel's plans to build about 1,000 housing units in east Jerusalem, and reflects growing international impatience with Israel's near half-century control of the West Bank, east Jerusalem and the Gaza Strip.
Israel says Palestinians can gain independence only through peace negotiations, and that recognition of Palestine at the UN or by individual countries undermines the negotiating process.
Palestinians say Israeli prime minister Benjamin Netanyahu is not serious about the peace negotiations.
The latest round of US-brokered talks collapsed in April. American officials have hinted that Israel’s tough negotiating stance hurt the talks, and Mr Netanyahu has continued to settle Israelis in the West Bank and east Jerusalem.
More than 550,000 Israelis now live in the two areas, greatly complicating hopes of partitioning the area under a future peace deal. The two territories and the Gaza Strip are claimed by Palestinians for a future state.
While the US and the major European powers have so far refrained from recognising Palestinian independence, they have become increasingly critical of Israeli settlement construction.