France became the first G7 country to announce the move last week - while Ireland, Spain and Norway all officially recognised a Palestinian state last year.
Mr Carney told reporters in Ontario that Canada would do the same on
certain conditions - including that the Palestinian Authority commits to
fundamentally reforming its governance, and holds general elections in
2026 in which Hamas can play no part.
The Canadian prime minister said he had spoken with Mahmoud Abbas,
the president of the Palestinian Authority, earlier in the day.
Following the announcement, the Israeli foreign ministry said in a
statement: "The change in the position of the Canadian government at
this time is a reward for Hamas and harms the efforts to achieve a
ceasefire in Gaza and a framework for the release of the hostages."
A White House official anonymously told Reuters that US President Donald Trump also believes he would be "rewarding Hamas" if he recognises a Palestinian state and therefore doesn't plan to do so.
"President Trump's focus is on getting people fed," the official added.
Canada had long stated it would only recognise a Palestinian state at the conclusion of peace talks with Israel.
However, Mr Carney said the reality on the ground - including the
starvation of citizens in Gaza - means "the prospect of a Palestinian
state is literally receding before our eyes".
He added: "We are working ourselves, with others, to preserve the
possibility of a two-state solution, to not allow the facts on the
ground, deaths on the ground, the settlements on the ground, the
expropriations on the ground, to get to such an extent that this is not
possible."
The Canadian prime minister also said he "condemns the fact Israel has allowed a catastrophe to unfold in Gaza".
Sir Keir Starmer announced the UK could recognise a Palestinian state after he had a meeting with Mr Trump the previous day.
Sir
Keir said the conditions Israel would have to meet to avoid such a move
included taking substantive steps to end the "appalling situation in
Gaza", and agreeing to a ceasefire.
Some 38 members of the House
of Lords, including some of the UK's most eminent lawyers, have since
written to the attorney general to say that recognising a Palestinian
state could be a breach of international law, The Times has reported.
They have said the territory may not meet the criteria for statehood under the Montevideo Convention, a treaty signed in 1933
Meanwhile, a Downing Street spokesperson confirmed Sir Keir had spoken to Mr Carney over the phone on Tuesday.
The
spokesperson said: "They discussed the grave situation in the Middle
East and last night's action by the United States to tackle the severe
threat posed by Iran's nuclear programme.
"Both reiterated their
support for a diplomatic solution and agreed that Iran must come back to
the negotiating table with the United States as soon as possible.
"They looked forward to continuing their discussions at NATO this week."
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