Slovenia's government agreed on Thursday to recognise the state of Palestine, following in the footsteps of European partners, in a push for Middle East peace.
The "message of peace" announced by Prime Minister Robert Golob is subject to approval by parliament, which could come as soon as next week.
Slovenia said its decision "sends a strong signal" to other countries to join the growing list after Spain, Ireland and Norway recognised Palestine this week.
The moves are intended to re-open a long-term peace process and have been welcomed by several Middle East countries, but opposed by Israel.
"The Israelis and Palestinians have the right to raise their children in peace, security and prosperity in their own states," said Slovenia's Foreign Minister Tanja Fajon.
"The recognition of Palestine is the only way for the two countries and peoples to coexist in peace."
Mr Golob said the decision "is not directed against anyone, not even Israel" but "is a message of peace". The Palestinian flag was displayed at government headquarters in Ljubljana.
Slovenia is an EU and Nato member that currently sits on the UN Security Council, which is set to consider a motion by Algeria calling for a ceasefire.
Veto power France is willing to support a "strong statement on Rafah", President Emmanuel Macron told his Palestinian counterpart Mahmoud Abbas in a phone call.
He said recognition should take place at a "useful time" as he called on Mr Abbas to "implement necessary reforms".
About two thirds of UN members recognise Palestine, the most notable absence being the US which last month vetoed a resolution on statehood.
The move by Slovenia is set to make it the third EU country to do so during the war in Gaza, alongside Spain, Ireland and non-EU member Norway.
Mr Golob's liberal coalition has a majority in Slovenia's 90-member parliament, meaning the vote is expected to pass.
Sweden recognised Palestine in 2014. A handful of countries did so before joining the EU, while key western players, including France and Germany, have not.
Israel opposes moves to recognise Palestine which it says reward Hamas violence. It has recalled its ambassadors to Spain, Norway and Ireland.
Mr Golob said recognition would apply to a Palestinian state within UN-agreed borders or those established in any future settlement.
Slovenia said in early May that recognition was a matter of "when, not if" as efforts gather pace towards a two-state peace settlement.
It had said it would review progress in June on ceasefire talks, the release of hostages and efforts to improve Palestinian self-government.
However, the process has been brought forward amid massive pressure on Israel to stop its attack on Rafah in the south of Gaza.
Israeli forces have continued operations in Rafah and attacked a camp for displaced Palestinians despite an order from the International Court of Justice to change course.
As the war nears its ninth month Israel said it had seized control of a corridor of land along Gaza's border with Egypt to cut off Hamas smuggling tunnels.
Spain and Ireland are pushing for the EU to consider trade measures against Israel for its continued attacks on Rafah.
Ministers in an Arab-Islamic council praised Spain's statehood move in talks with Prime Minister Pedro Sanchez on Wednesday.
However, there was controversy in Spain as the leader of far-right party Vox, Santiago Abascal, met Israeli Prime Minister Benjamin Netanyahu in open defiance of the Spanish government's move.
Mr Abascal praised the Israeli leadership for its "firmness" and claimed Mr Sanchez's "real reason" to recognise Palestine was a corruption probe into his wife.
Foreign Minister Jose Manuel Albares accused Mr Abascal of inflaming the situation.
"Abascal is embracing the policy of falsehoods, slander and insults coming from the most extreme elements of Netanyahu's government," he said.
