Lord David Cameron has said there must be “irreversible progress” towards a Palestinian state to enable peace.
While the British government has long supported a two-state solution, the foreign secretary claimed that formal recognition of a Palestinian state could be moved forward in that process.
Speaking at a Westminster reception on Monday night, Lord Cameron said: "We [the UK government] - with allies - will look at the issue of recognising a Palestinian state, including at the United Nations.
"That could be one of the things that helps to make this [peace] process irreversible."
Israel has faced 30 years of failure, he said, because it has failed to establish security for its citizens.
To secure peace, a new Palestinian authority with “technocratic and good leaders” would need to be established to govern Gaza.
Lord Cameron continued: "Together with that, almost most important of all, is to give the Palestinian people a political horizon so that they can see that there is going to be irreversible progress to a two-state solution and crucially the establishment of a Palestinian state.
"We have a responsibility there because we should be starting to set out what a Palestinian state would look like, what it would comprise, how it would work and crucially, looking at the issue, that as that happens, we with allies will look at the issue of recognising a Palestinian state, including at the United Nations.
"That could be one of the things that helps to make this process irreversible."
Any deal would also require the release of all Israeli hostages still remaining in Gaza, Lord Cameron added.
He said: "There is a path that we can now see opening up where we really can make progress, not just in ending the conflict, but progress in finding a political solution that can mean peace for years rather than peace for months.”
Hussam Zomlot, Palestine's representative in Britain, hailed Lord Cameron's statement as "historic".
"It is the first time a UK Foreign Secretary considers recognising the State of Palestine, bilaterally and in the UN, as a contribution to a peaceful solution rather than an outcome,” he wrote on X.
"A UK recognition is both a Palestinian right and a British moral, political, legal, and historical responsibility. If implemented, the Cameron Declaration would remove Israel’s veto power over Palestinian statehood, would boost efforts toward a two state outcome, and would begin correcting the historic injustice inflicted on the Palestinian people by colonial Britain’s Balfour declaration.”