Sweden's new center-left government will recognize the state of Palestine in a move that will make it the first major European country to take the step.
The U.N. General Assembly approved the de facto recognition of the sovereign state of Palestine in 2012 but until now, neither the European Union nor most EU countries have made the move.
But in his inaugural address to the Swedish parliament, Prime Minister Stefan Lofven confirmed that it would designate Palestine as a state.
"The conflict between Israel and Palestine can only be solved with a two-state solution, negotiated in accordance with international law," he said
Lofven added that peace “requires mutual recognition” and as such “Sweden will therefore recognize the state of Palestine."
For the Palestinians, the move will come as a welcome boost for its ambitions.
With a 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.
However, there is likely to be strong criticism of Sweden from Israel, as well as from the United States and the EU, which maintain that an independent Palestinian state should only emerge through a negotiated process.
Within the EU, some countries, such as Hungary, Poland and Slovakia recognize Palestine, but they did so before joining the 28-member bloc.
If the center-left government fulfills its plans, Sweden would be the first country to recognize Palestine while being a member of the European Union.
The Social Democrats and Greens hold a minority of seats in parliament and the incoming center-left government is likely to be one of Sweden's weakest for decades.
The former center-right government would not recognize 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 via negotiations with Israel on a two-state solution, negotiations that are currently suspended.