Israel's ambassador to Australia accused Canberra of rewarding terrorism after Prime Minister Anthony Albanese said his country would formally recognize a Palestinian state in September.

Australia is the latest major country to announce the move to recognize the State of Palestine, following the U.K., France, and Canada, amid escalating concern about the dire situation in Gaza as Israel wages war against the Hamas militant group.

Albanese said that a "two-state solution was the basis of peace and security for the peoples of the region," though Australian recognition comes with certain conditions, including demilitarization of Gaza and democratic elections.

"Peace is built by ending terror, not rewarding it," Amir Maimon, Israeli ambassador to Australia, said in a statement on Monday.

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