The UK will formally recognise the state of Palestine this September as a result of the “increasingly intolerable” situation on the ground in Gaza, unless Israel abides by a ceasefire and commits to a two-state solution in the Middle East.

Keir Starmer’s cabinet has agreed a roadmap for peace in the region after coming under intense domestic pressure over the mounting humanitarian crisis in the territory, and calls to follow France in acknowledging statehood.

The prime minister recalled his cabinet from their summer break to approve the plan after holding talks with Donald Trump in Scotland. The US president said the issue had not come up, but that he did “not mind” the UK taking a position, even if he would not.

Starmer told his ministers that, because of the catastrophic situation on the ground in Gaza and the diminishing prospect of reaching a two-state solution, now was the right time to finally move.

“Ultimately, the only way to bring this humanitarian crisis to an end is through a long-term settlement,” he told reporters. “Our goal remains a safe and secure Israel alongside a viable and sovereign Palestinian state, but right now, that goal is under pressure like never before.”

He added: “I have always said that we will recognise a Palestinian state as a contribution to a proper peace process, at the moment of maximum impact for the two-state solution. With that solution now under threat, this is the moment to act.”

UN-backed experts said a “worst-case scenario of famine” was playing out in Gaza as the World Food Programme (WFP) described the hunger crisis in the territory as the worst seen this century, comparing it to previous famines in Ethiopia and Biafra. Israel has denied its actions in Gaza have caused famine.

It came as the death toll from Israeli attacks in the war passed 60,000 people according to Gaza health ministry figures, almost half of them women and children.

Israel has repeatedly limited aid trucks reaching Gaza during 22 months of war, and halted shipments entirely for six weeks at the start of the war, and between March and mid-May this year.

Shipments are below levels needed to cover basic needs and the WFP says only about half of the aid it has requested to enter Gaza is reaching the territory after Israel eased restrictions over the weekend.

In a significant shift in the UK’s approach, Starmer said that recognition would take place before the UN general assembly in New York this September, unless Israel agreed to a series of conditions set out in the UK-led eight-point peace plan, and backed by allies.

These were for Israel to take “substantive steps” to end the situation in Gaza, reach a ceasefire, commit to no annexation in the West Bank, as well as a long-term peace process. Starmer spoke to the Israeli prime minister, Benjamin Netanyahu, before the announcement.

Israel’s foreign ministry last night told Starmer it “rejects” his statement, which it said on social media site X amounted to a “reward for Hamas”.

“The shift in the British government’s position at this time, following the French move and internal political pressures, constitutes a reward for Hamas and harms efforts to achieve a ceasefire in Gaza and a framework for the release of hostages,” it added.

Netanyahu posted on X that Starmer had rewarded “Hamas’s monstrous terrorism”.

“A jihadist state on Israel’s border today will threaten Britain tomorrow,” he added.

The UK government also repeated its existing demands of Hamas, which it said must release all hostages immediately, disarm, sign up to a ceasefire and accept it would play no role in the government of Gaza.

“We’ll make an assessment in September on how far the parties have met these steps, but no one should have a veto over our decision,” the prime minister added.

However, there was some domestic pushback from the Liberal Democrats and the Greens against the government using the prospect of statehood as a “bargaining chip”. They both argued the UK should recognise Palestine immediately.

The UK roadmap follows an agreement to work towards “lasting peace” in the region with the French president, Emmanuel Macron, and the German chancellor, Friedrich Merz, at the weekend. Starmer planned to spend Tuesday evening on calls to allies, including Gulf states.

After their talks in Scotland on Monday, Trump removed a key obstacle to the UK recognising a Palestinian state, signalling the US – one of Israel’s strongest backers – would not object to such a move. He also expressed concern at images of children starving in the territory.

However, a spokesperson for the US state department on Tuesday evening called Starmer’s remarks a “slap in the face for the victims of October 7”.

“It gives one group hope, and that’s Hamas. It is a rewarding of that kind of behaviour,” Tammy Bruce said, adding: “There’s one group that benefits from the images, the reality of the horribleness, and that’s Hamas. And so there’s a reason why they don’t cooperate and stop.”

Downing Street had insisted that formal recognition of Palestine was a matter of “when, not if”, with the Labour government facing calls to take further action as UK public opinion hardened over horrific scenes on the ground.

Britons are in favour of recognition by more than three to one, according to polling by Survation, which shows 49% of people in favour, and only 13% opposed. It also suggested that, by a margin of almost five to one, people wanted the government to be more critical of Israel’s actions in Gaza.

Starmer told reporters the humanitarian situation, which was “getting worse by the day”, was behind the timing of the UK’s decision, along with concerns that the possibility of a two-state solution was receding. The UK has worked with Jordan to drop 20 tonnes of aid by air in recent days.

“We’ve been saying for some considerable time now we need to get more aid in at volume and at speed, and the situation now is absolutely catastrophic, which is why I’ve taken this decision today in relation to the two-state solution and the recognition of Palestine,” he said.

The Guardian revealed last week that Starmer was under pressure from cabinet ministers for the UK to immediately recognise Palestine as a state, joining almost 140 other countries, as global outcry grew over Israel’s killing of starving civilians in Gaza.

Angela Rayner, the deputy prime minister, Yvette Cooper, the home secretary, and Wes Streeting, the health secretary, are understood to have been among them, while more than a third of Labour MPs signed a letter backing recognition.

Announcing the move at the UN, foreign secretary David Lammy said the UK hoped it could affect the situation on the ground in Gaza over the next eight weeks.

He added the UK, which first supported the establishment of a Jewish state in Palestine in 1917, bore a “special burden of responsibility” to back a two-state solution.

“The Netanyahu government’s rejection of a two-state solution is wrong; it’s wrong morally; and it’s wrong strategically. It harms the interests of the Israeli people, closing off the only path to a just and lasting peace,” he said.