The European Parliament has adopted a resolution supporting Palestinian statehood in principle, in a compromise motion that did not follow some European national legislatures in backing immediate recognition of a Palestinian state.
Following a deal among the main parties, the motion on Wednesday was carried by 498 votes to 88.
"[The European Parliament] supports in principle recognition of Palestinian statehood and the two-state solution, and believes these should go hand in hand with the development of peace talks, which should be advanced."
Lawmakers on the left had originally wanted to urge the EU's 28 member states to recognise Palestine now without conditions.
This follows Sweden's decision in October to do so and non-binding votes since then by parliaments in Britain, France and Ireland in favour of recognition
On Wednesday, Luxembourg's parliament became the latest to urge the government to recognise a Palestinian state.
The series of votes demonstrated growing European impatience with Israel and the stalled peace process.
Since the collapse of the latest US-sponsored peace talks in April, Israel has pressed on with building settlements in territory the Palestinians want for their future state.
However, conservatives and centrists in the EU parliament said recognition should only form part of a negotiated agreement with Israel.
"With this vote, the European Parliament has clearly rejected an unconditional recognition separate from the peace negotiations," Elmar Brok, a German conservative who chairs the parliament's foreign affairs committee, told the Reuters news agency.