What does recognising a Palestinian state mean?
The Prime Minister heralded the decision as a step toward breaking 'the cycle of violence in the Middle East' and bringing 'an end to the conflict, suffering and starvation in Gaza'.
Though, not everyone agrees.
Since making his Palestine declaration on Monday, Mr Albanese has been both accused of 'rewarding' Hamas and praised for joining global push to realise the rights of Palestinians.
His more mild critics have argued it will do nothing to end the humanitarian catastrophe in Gaza.
For better or worse, it is historic. So, why now and how will it all work?
Why now?
The 'momentum towards two states', as Foreign Minister Penny Wong described it, comes amid outrage over severe civilian suffering in Gaza, where Israeli forces have spent nearly two years relentlessly pursuing Islamist militants behind the October 7 attacks in 2023.
Hamas, the group responsible, runs Gaza and its operations riddle the densely populated Palestinian territory, with tunnels and armouries nestled in civilian zones.
More than 60,000 have been killed in the 22 month-long conflict, according to Gazan health officials.
How many of those are Hamas fighters is unclear and because foreign reporters cannot enter Gaza, figures are hard for media to independently verify.
But the death toll stacks up with assessments from independent monitors and local journalists working for trusted international agencies.
So too do reports that nearly 200 have starved to death due to Israel's chokehold on aid.
With the Israeli government rejecting that people were starving, French President Emmanuel Macron said in late July that it was time to break the status quo and make meaningful steps toward a two-state solution – Israelis and Palestinians living within sovereign, internationally recognised borders.
The UK and Canada quickly followed suit, paving the way for Australia.
Though, Donald Rothwell, a leading international law expert, said 'it's clear the Albanese government had been laying the groundwork' since 2024.
'There was obviously a significant intensity about how the government sought to build and prosecute its case over the course of the last 16 days or so,' he told NewsWire.
Mr Rothwell pointed to three key developments that he said likely 'accelerated' Mr Albanese's decision.
The first was Israeli Prime Minister Benjamin Netanyahu announcing plans to occupy all of Gaza.
Australia joined several Western countries in condemning the plans in a statement, saying that actioning them would 'aggravate the catastrophic humanitarian situation, endanger the lives of the hostages, and further risk the mass displacement of civilians'.
The second development was Israeli settlers stepping up efforts to annex land in West Bank – the second Palestinian enclave and only territory controlled by the Palestinian Authority.
The final development was a vote in Israel's parliament that showing overwhelming opposition to Palestinian statehood.
Mr Netanyahu mentioned the vote in a press conference on Sunday.
He told reporters the 'Jewish public is … against the Palestinian state for the simple reason that they know it won't bring peace'.
'It'll bring war,' he said.
Mr Rothman said 'all those factors combined' drove the urgency.
How will it work?
Mr Albanese named four key commitments he secured from Mahmoud Abbas, the president of the Palestinian Authority (PA).
The first two include Hamas having 'no role' in a future Palestinian state and the PA recognising 'Israel's right to exist in peace and security'.
While Mr Albanese said Mr Abbas 'reaffirmed' his support for the second point, the PA has no presence in Gaza and no control over Hamas.
As Mr Rothwell said, 'It's not clear to me at all as to how the Palestinian Authority can achieve that, given that it has no control or authority over Hamas in Gaza.'
The PA itself is commonly criticised for its corruption, ineffectiveness and lack of elections.
The last presidential vote was in 2005.
It also has a radicalisation problem in West Bank and pays families of 'martyrs' – Palestinians wounded or killed in flare ups with Israel.
The 'Martyrs Fund' has been heavily criticised as supporting terrorism.
Mr Albanese said Mr Abbas also committed to demilitarising and holding elections, and scrapping the payments to martyrs' families as part of broader transparency reforms.
On election, Mr Rothwell said he could not see how the PA could hold 'fair and free elections' before the UNGA next month.
Instead, he said the Albanese government and others promising to recognise Palestine are 'really trying to hold Mahmoud Abbas and the Palestinian Authority to … free and true elections sometime towards the end of 2025 or early 2026'.
In terms of how Australia recognises Palestine, Mr Rothwell said the Albanese government has taken an 'exceptional' pathway.
A government can recognise a state at any time – it does not need to be at the UN General Assembly (UNGA).
He said that in 'most instances' recognition is made official via a statement, so Mr Albanese announcing it to reporters from the prime ministerial courtyard on Monday 'was quite exceptional'.
'But then to have a two-step process, effectively saying in Canberra on the 11th of August, we're going to recognise, but then we're formally going to recognise that the UNGA … just falls into the notion of a Palestinian exception,' Mr Rothwell said.
When Mr Albanese travels to the UN in New York next month, he will vote, alongside the leaders of France, the UK, Canada and several other countries, to join the 147 nations that already recognise Palestine.
'It's obviously a peak forum at which these matters can be discussed,' Mr Rothwell said.
'And in recent years, that peak forum in September has set aside some time for debate and discussion about Palestinian membership of the United Nations.'
But he noted that 'the General Assembly vote is just one part of a two part process for a state becoming a member of the United Nations'.
'In the second part of that process is endorsement of that UN General Assembly vote by the Security Council,' Mr Rothwell said.
Last year, a vote passed the General Assembly but was vetoed by the US in the Security Council.
This has happened several times and the Trump administration is staunchly against Palestinian statehood while Hamas controls Gaza.
But Mr Rothwell pointed out that statehood does not require UN membership.
For example, Australia recognises Kosovo even though it is not a UN member.
'It's not exceptional that Australia recognises a state which is not a member of the United Nations,' Mr Rothwell said.
'Secondly, there are some states out there that Australia recognises who are not UN members and then membership may well be delayed or deferred or constantly blocked for a number of political reasons.'
He added that 'throughout the history of the United Nations, that's not necessarily been exceptional'.
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