New Zealand will not recognise a Palestinian state at this time but remains committed to a two-state solution, Foreign Minister Winston Peters said.
"With a war raging, Hamas remaining the de facto government of Gaza, and no clarity on next steps, too many questions remain about the future state of Palestine for it to be prudent for New Zealand to announce recognition at this time," Peters said in a speech at the United Nations General Assembly in New York on Friday.
"We are also concerned that a focus on recognition, in the current circumstances, could complicate efforts to secure a ceasefire by pushing Israel and Hamas into even more intransigent positions," Peters added.
New Zealand Prime Minister Christopher Luxon said in Auckland on Saturday that "recognition of Palestinian statehood is a question of when, not if".
New Zealand's position is out of step with traditional partners Australia, Canada and Britain who all recognised a Palestinian state on Sunday. The move aligned them with more than 140 other countries also backing Palestinians' aspiration to forge an independent homeland from the occupied territories.
A handout from the New Zealand government on Friday said that it hoped to recognise a Palestinian state at a time when the situation on the ground offers greater prospects for peace and negotiation than at present.
New Zealand's opposition Labour Party criticised the decision and said it would put the country on the wrong side of history.
Labour foreign affairs spokesperson Peeni Henare said New Zealand will feel let down by the government today.
"There is no two-state solution or enduring peace in the Middle East without recognition of Palestine as a state," Henare said.