Until there are permanent states for both Israelis and Palestinians, peace will never be anything other than temporary, Albanese tells reporters on Monday.
Australia will recognize the Palestinian people's right to a state of their own.
He continues to state that the Palestinian Authority has assured him that there is "no role for the terrorists in Hamas in a future Palestinian state".
The recognition will take place at the UN General Assembly in September and comes after France announced that it will do the same. The United Kingdom and Canada have also stated that they are considering recognizing a Palestinian state.
According to the news agency AFP's calculations, at least 145 of the 193 member states in the UN have recognized Palestine or are considering doing so.