The European Parliament overwhelmingly backed the recognition of a Palestinian state "in principle" on Wednesday, following a series of votes on the issue in EU nations that have enraged Israel.
Lawmakers approved the motion by 498 votes to 88 with 111 abstentions, although it was a watered down version of an original motion which had urged EU member states to recognise a Palestinian state unconditionally.
The motion said the parliament "supports in principle recognition of Palestinian statehood and the two state solution, and believes these should go hand in hand with the development of peace talks, which should be advanced".
The vote came hours after a European court ordered the EU to drop the Palestinian Islamist group Hamas from its terrorism blacklist on technical grounds.
The socialist, greens and radical left groups in the European Parliament had wanted an outright call for the recognition of Palestinian statehood.
But the centre-right European People's Party of European Commission chief Jean-Claude Juncker, the leading group in parliament, forced them into a compromise motion linking it to peace talks.
"There is no immediate unconditional recognition (of statehood)," EPP chief Manfred Weber said.
But his socialist counterpart Gianni Pittella insisted it was a "historic decision" and a "victory for the whole parliament".
Several European parliaments have passed motions urging their governments to recognise a Palestinian state in recent weeks in a bid to pressure Israel to relaunch the moribund peace process.
France, Britain, Spain, Ireland and Portugal have all passed votes to that end.
Sweden has gone even further, officially recognising Palestine as a state.