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He said Ottawa intends to officially recognize the State of Palestine at the UN General Assembly in September.

"This intention is predicated on the Palestinian Authority's commitment to much-needed reforms, including … general elections in 2026 in which Hamas can play no part, and to demilitarize the Palestinian state," Carney said.

The Prime Minister's Office said Carney spoke on Wednesday with Mahmoud Abbas, president of the Palestinian Authority.

"Prime Minister Carney welcomed President Abbas's commitment to these reforms," it said in a statement.

"The prime minister informed the president that Canada will increase its efforts to promote peace and stability in the region, and work closely with regional allies toward this goal."

For decades, Canada has called for a two-state solution, which means the eventual creation of a Palestinian state that would exist in peace alongside Israel. For years, Ottawa has suggested this would come at the end of a peace negotiation between Palestinian and Israeli leaders.

In recent months, Ottawa has been reluctant to join other countries in bestowing official recognition because the Palestinian territories are divided and have not held elections in years.

But amid rising starvation in Gaza and expanding settlements in the West Bank, France announced last week it would soon recognize Palestine and the U.K. said it intends to do so if Israel does not drastically change its actions in the territories.

Carney said there is a "necessity" for Canada to act as well as "an ability to influence" the situation in partnership with allies.

He said both Israeli and Palestinian leaders have been making it harder to get to a two-state solution.

"Prospects for a two-state solution have been steadily and gravely eroded, including by the pervasive threat of Hamas terrorism to Israel and its people, culminating in a heinous attack of Oct. 7, 2023," he said.

"The accelerated settlement-building across the West Bank and East Jerusalem … while settler violence against Palestinians has soared, has also undermined the process."

He also cited "the ongoing failure of the Israeli government to prevent the rapidly deteriorating humanitarian disaster in Gaza, with impeded access to food and other essential humanitarian supplies."

Israel's embassy in Ottawa rejected Canada’s endorsement of Palestinian statehood and repeated its claim that Israel has met its obligations on humanitarian aid — despite U.S. President Donald Trump and most major global organizations saying Israel has allowed starvation to spread in Gaza.

Israel "will not bow to the distorted campaign of international pressure against it," Israeli Ambassador Iddo Moed wrote in a media statement.

The embassy said recognizing a Palestinian state in the absence of an accountable government or functioning institutions "rewards and legitimizes the monstrous barbarity of Hamas … vindicates Hamas's Western sympathizers fuelling antisemitism, and hardens Hamas’s position at the negotiation table at a most critical time."

Late Wednesday night, the U.S. president took to his Truth Social platform to share his opinion on the matter. Trump suggested that Ottawa's backing of Palestinian statehood would make it "very hard" for his administration to make a trade deal with Canada.

The Conservative Party of Canada also attacked the decision. It said recognizing a Palestinian state in the aftermath of the October 7 attack "sends the wrong message to the world."

"If the government recognizes the Palestinian state now, it is impossible that Hamas will not play a central role," the statement says. "Surely, Canadians cannot support validating Hamas with the status of government."

Centre for Israel and Jewish Affairs CEO Noah Shack said the move "is predicated on misplaced faith in vague commitments by Palestinian Authority President Mahmoud Abbas, notorious for his corruption, lack of democratic credibility, and funding of terrorists."

"Extending recognition absent real change on the ground is a recipe for another failed Palestinian pseudo-state controlled by terrorists," Shack said. "It is deeply concerning that the government did not link statehood recognition to the removal of Hamas and the return of Israeli hostages. This only emboldens Hamas and condemns Palestinians and Israelis — including the hostages and their families — to more suffering."

The NDP said that Carney should proceed with an arms embargo and suspend Canada's free trade agreement with Israel.

"This decision reflects the power of the people to push governments to do the right thing," wrote NDP foreign affairs critic Heather McPherson.

"It should not have taken the Liberals this long to make this decision — and it should not take until September to implement it."

At a press conference on Parliament Hill Wednesday evening, CEO of the National Council of Canadian Muslims Stephen Brown said this is a "historic day for Canada."

He said the organization is glad to see Canada join the "global majority" moving toward recognition of Palestinian sovereignty. He said the government's decision is "a small step in the right direction" and affirms that long-term peace can't come without Palestinian self-determination.

"At the same time, this is not the end point," Brown said, adding that more humanitarian aid must be allowed into Gaza. "Palestinian Canadians, and indeed all Canadians spanning all demographics, want to see the full weight of diplomatic pressure applied on Israel such that it allows food, aid and water into Gaza right now."

Carney's announcement came hours after dozens of former senior Canadian diplomats sent a letter to media outlets calling on Canada to recognize a Palestinian state, impose a full arms embargo on Israel and restrict exports from settlements that Canada deems illegal.

The letter, signed by 173 former Canadian diplomats, says Canada should advocate for "a UN mission to monitor a ceasefire and create a protected humanitarian corridor" in Gaza.

The ex-diplomats say Ottawa should "urgently impose trade restrictions on all Israeli exports originating from illegal settlements in the occupied territories" and sanction those "directly involved in or facilitating illegal settlements."

They say Canada needs to defend its interests and values and ramp up pressure on both Israel and Hamas for a ceasefire in Gaza.

Carney said in June that there must be "a Zionist, if you will, Palestinian state that recognizes the right of Israel to exist."

Last November, the Trudeau government changed Canada's policy on the matter, saying that Ottawa could offer recognition before peace talks conclude instead of first requiring a successful peace deal with Israel.

Recognizing a Palestinian state would upgrade the Palestinian Authority's status in Canada.

Like Taiwan, Palestine already has a special representative office in Ottawa. It can issue Palestinian passports and has an ambassador-rank official who can meet with senior Canadian officials. Full recognition would upgrade that delegation to an embassy.

The main goal of countries that have recently recognized Palestinian statehood is to preserve the two-state solution as Israeli cabinet ministers call for Palestinians to be expelled.

Palestinian governance is currently split between the three territories that Israel has occupied since 1967.

Israel has control over East Jerusalem, which the Palestinians claim as the capital of a future state. In 1947, the UN called for the city to become a neutral, international city.

The Palestinian Authority currently controls large parts of the West Bank through the Fatah party. Hamas has full control of Gaza.

Neither territory has held an election since 2006 and polls by the anti-corruption Aman Coalition think tank have found widespread concerns about corruption in both governments.

This report by ¹ú²úÓÕ»ó¸£Àû was first published July 30, 2025.