Australia supported a declaration of Palestinian rights at the United Nations to push for an end to violence in the Middle East and increase momentum for a peaceful resolution.
The non-binding UN General Assembly motion urged Israel to "bring to an end its unlawful presence in the Occupied Palestinian Territory as rapidly as possible".
It further recognised the "inalienable rights of the Palestinian people, primarily the right to self-determination and the right to their independent state".
It passed overwhelmingly with 157 in favour, eight against and seven abstentions including Israel and the United States.
Australia would vote for resolutions it believed would contribute to peace and a two-state solution, where an Israeli and Palestinian state exist harmoniously side-by-side, a spokesperson for Foreign Minister Penny Wong said.
"Our only hope is working within the international community to push for an end to the cycle of violence and work toward a two-state solution," the spokesperson said.
Australia shifting its position from abstaining to yes on the resolution "reflects our determination that the international community again work together to build momentum towards this goal", its ambassador to the UN James Larsen said.
Australia also moved its vote from no to an abstention on a UN division being resourced to promote Palestinian rights and again voted no on a motion demanding Israel withdraw from the occupied Syrian Golan.
Mr Larson said the move to abstain on the division "reflects our frustration ... a Palestinian state still doesn't exist" 77 years after a resolution called for a two-state peace plan.
But Australia couldn't support the push due to reservations about devoting "too many resources to a one-sided perspective of the conflict", he added.
The division motion passed with 101 in favour and 27 against with 42 abstentions. The Syrian Golan vote passed with 97 in favour and eight against with 64 abstentions.
The support of Palestinian rights and Israel's withdrawal was welcomed by the Australia Palestine Advocacy Network and the Australian Federation of Islamic Councils.
The Australian government needed to pressure Israel to end its occupation, both said in separate statements.
Australia/Israel and Jewish Affairs Council executive director Colin Rubenstein expressed disappointment, saying the motion was one-sided as it demanded nothing from Palestinians or designated terror group Hamas.
The Albanese government "has sold out the Jewish community", Opposition Leader Peter Dutton said, accusing it of shifting the position for political gain.
But the Jewish community doesn't have a homogenous view, with the Jewish Council of Australia critical of the war in Gaza and branding Israeli Prime Minister Benjamin Netanyahu extremist as it calls for sanctions.
"Palestinians in the occupied territories have been living under the world's longest illegal military occupation," executive officer Max Kaiser told AAP.
"We hope that this vote signals a shift in Australia's foreign policy towards refusing to excuse Israel's overwhelming violence and human rights violations against Palestinians."
Further, Labor's longstanding policy is to recognise Palestinian statehood with some caveats and no timeframe attached. The top international court has declared Israel's occupation illegal and called for withdrawal.
Australia's position is Israel's occupation of Palestinian territory is illegal and "a significant obstacle to peace".
Following Hamas' October 7 attack on Israel in 2023, fighting has widened in the region from Gaza to include Lebanon, Yemen and Iran.
About 1200 Israelis were killed in the Hamas offensive, with some 250 more taken hostage, dozens of whom remain captive in Gaza, according to Israel's tally.
Hamas says 33 hostages have been killed throughout the war.
More than 45,000 Palestinians have been killed since Israel launched its retaliatory strikes on Gaza, according to the local health authority.
