Christopher Luxon and Winston Peters. Photo: RNZ / Samuel Rillstone
An academic is accusing the coalition of sitting on the fence during the Gaza conflict so they don't upset the United States.
New Zealand has fallen out of step with Australia, Canada, France and the UK in its positioning on Palestinian statehood.
Australia confirmed it would make the formal recognition at next month's UN General Assembly on Monday afternoon.
Minutes beforehand, Foreign Affairs Minister Winston Peters put out a statement saying he had raised the issue in Cabinet.
"Cabinet will take a formal decision in September over whether New Zealand should recognise a state of Palestine at this juncture - and if so, when and how," his statement said.
Fronting questions in his post-Cabinet media conference, Prime Minister Christopher Luxon would not elaborate on what factors Cabinet was considering, what his colleagues views were, what his view was or what the decision-making process would look like, other than "ongoing conversations" among Cabinet members.
Auckland University law professor Treasa Dunworth said the statements put out by countries like Australia weren't without their problems.
"It's conditional on Hamas not being part of the post war governance structures in Palestine but the whole idea of state recognition is that the state gets to choose. That's what self determination is," Dunworth said.
However, Dunworth said "the time for action was some time ago" and New Zealand had fallen behind many other countries in its position on Palestinian statehood.
"I don't accept that they haven't been thinking about this because that's just not credible. They do know and therefore they're fence-sitting because they're not entirely sure which way the wind is blowing," Dunworth said.
"We have to raise questions about whether this is all about our diplomatic relationship with the United States and looming above that is the question of the tariffs being imposed by Donald Trump.
"If they want to sell New Zealand out on the basis of trade advantage or disadvantage then so be it, at least say that honestly, rather than hiding behind, 'oh it's complicated'."
Luxon has denied the coalition's position has anything to do with the United States, reiterating New Zealand has an independent foreign policy.
"We'll make our own decisions that are right for New Zealand and consistent with our values," he told reporters on Monday.
Labour leader Chris Hipkins said a move to recognise Palestinian statehood was well overdue.
"What's really concerning is that New Zealand doesn't appear to have a coherent position on Palestine, doesn't seem to be able to articulate why we're not recognising Palestine as a state or what the criteria might be for us to recognise Palestine as a state," Hipkins said.
"It's well and truly time for the government to put this issue to bed. Recognise Palestine. It's the right thing to do."
Green Party co-leader Chlöe Swarbrick - who's put forward a members bill to sanction Israel - said the whole situation was baffling.
"It's just honestly mind-blowing. This government for the better part of two years has said that is is doing everything it can while it sits on its hands. Palestinians can't eat empty statements."
RNZ asked voters hurrying home in the wintry weather on Monday night what they thought the government's position should be.
"If they're considering it they've probably got their reasons for and against," one Wellington woman said.
"It's a very complicated situation," another woman said.
"I really don't know. In a way it's none of our business, in another way it's a humanitarian crisis," a Wellington man said.
"The least we should be doing is recognising a Palestinian state," another Wellington man said.
"There's people starving there, there's people dying there every day. It's stupid not to recognise Palestine," an Auckland woman said.
"I think it's the only pathway to peace really... the sooner the better," an Auckland man said.
Peters will travel to New York in late September to represent New Zealand at the UN General Assembly.
Asked if the public would know Cabinet's decision on recognising a Palestinian state before Peters heads to the US, Luxon said he suspected so.
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