cItaly will vote in favour of granting upgraded status to the Palestinians at the United Nations later on Thursday, the government said, despite earlier press reports that it would abstain.
"Italy has decided to offer its support for the resolution giving Palestinian non-member permanent observer status at the General Assembly of the United Nations," the government said in a statement.
"This decision is an integral part of the Italian government's commitment to relaunching the peace process with the aim of a two-state solution," it added.
Italian Prime Minister Mario Monti called Palestinian leader Mahmud Abbas and Israeli Prime Minister Benjamin Netanyahu to explain his decision.
Monti told Netanyahu "this decision does not imply any distancing from the strong and traditional friendship towards Israel," the statement said, adding that Monti believed Israel had "the right to guarantee its security".
Monti has visited Israel twice since becoming premier in November 2011.