New Zealand supported a successful bid by Palestine on Friday to upgrade its status in the United Nations.
It has become a non-member state on a general assembly vote of 138 to nine with 41 abstentions.
Palestine was previously a non-member entity and President Mahmud Abbas says the vote delivered a birth certificate for his nation.
The United States, Israel and Canada were among countries opposed to the change while France led a group of European powers backing Palestine's bid. Australia and Britain were among the abstentions.
Foreign Minister Murray McCully says the decision to support Palestine's resolution reflected a long-standing policy position.
"We believe that Israel and a Palestinian state should exist side by side, each respecting the other's right to peace," he said.
"Palestine has delivered a resolution that is moderate, constructive and reflects our commitment to a two-state solution."
Mr McCully said before the vote that New Zealand's representative would explain the government's "absolute commitment" to Israel's right to safety and condemn the actions of Hamas extremists.
"However, we will also assert our support for the moderate leadership of President Abbas, Prime Minister Fayyad and others who are working to make a two-state solution a viable goal."
The Green Party backed the government's position.
"New Zealand needs to make sure that Palestine and its people enjoy the rule of international law and secure their legitimate political rights," global affairs spokesman Kennedy Graham said.
"This will establish the right framework for negotiations and promote the chances of a credible and enduring political settlement to the Israel-Palestine problem."