Prime Minister Anthony Albanese revealed Australia will join the UK, Canada and France in recognising Palestinian statehood at a United Nations General Assembly meeting in September, after mounting pressure to alleviate civilian suffering in Gaza.
The US has long been one of Australia's most important allies, but for decades it has remained staunchly opposed to the recognition of Palestine.
While some have argued Australia's decision to break from the US could imperil the bilateral relationship, Flinders University international relations lecturer Jessica Genauer says the federal government's diplomatic calculus has helped dampen any impact.
"Because Australia waited until other important countries all said they're planning to recognise Palestine ... I don't think it will be singled out by the US," Dr Genauer told AAP.
"The Trump administration is opposed to countries recognising Palestine, but I think that they would put Australia in with a whole group of other countries and it wouldn't particularly be detrimental to Australia's relationship."
Since US President Donald Trump began his second term, the Labor government has intentionally opted not to align too closely with his policy directions.
Instead, Australia has worked closely with European nations and other partners to ensure it is part of a strong network of middle powers.
This approach has been used to navigate a response to Russia's invasion of Ukraine, and now with Palestinian recognition, Dr Genauer said.
Opposition Leader Sussan Ley said Australia's announcement on statehood was "disrespectful" of its relationship with the US and could jeopardise peace as any ceasefire would be brokered by America.
But the prime minister defended his decision.
"President Trump has made it very clear he wants to see peace in the region. Australia wants to see peace in the region," he said.
"We make our sovereign decisions as a nation state in Australia's national interest and we are aligning ourselves with like-minded countries."
While recognising Palestine would not immediately change anything for the two million people in Gaza the UN projects are facing severe food insecurity, Dr Genauer said the move was important because it showed countries were looking for any possible way to shift the situation.
More than 140 out of the 193 United Nations member states already recognise Palestine, but the addition of Australia - a strong middle power - alongside the UK and France, which have veto power in the UN Security Council, will add significant pressure.
"The United States is now quite isolated in their position blocking that recognition," she said.
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