Ireland, Norway, and Spain have announced they will formally recognise a Palestinian state from 28 May.
Israel reacted angrily, warning the move would mean more instability in the region and recalling its ambassadors to all three countries.
Both Hamas and its rival, the Palestinian Authority, have welcomed the recognition.
Norway was first to make its announcement Wednesday in a move co-ordinated with the other two countries.
Prime Minister Jonas Gahr Støre said in an address that the move was "in support of moderate forces that are on a retreating front in a protracted and cruel conflict".
"This is an investment in the only solution that can bring lasting peace in the Middle East," he added, referring to the so-called two-state solution which would see an Israeli and a Palestinian state existing peacefully next to each other.
"Today, we state clearly our unambiguous support for the equal right to security, dignity, and self-determination for the Palestinian and Israeli peoples," Irish Foreign Minister Micheál Martin said.
The country's Taoiseach (Prime Minister) Simon Harris later stressed that "Hamas is not the Palestinian people".
"Today's decision to recognise Palestine is taken to help create a peaceful future," he said.
Mr Harris's comments were echoed by Spanish Prime Minister Pedro Sanchez, who said the move was "not against Israel, is not against the Jews".
"It is not in favour of Hamas, which is something that has been said. This recognition is not against anyone, it is in favour of peace and coexistence."Israel reacted to the announcements with fury.
Prime Minister Benjamin Netanyahu denounced the move by Ireland, Norway and Spain as a "reward for terrorism" and said it would not bring peace.
Foreign Minister Israel Katz said he was ordering the immediate return of the Israeli ambassadors to all three countries for "consultations".
"Israel will not go over this in silence - there will be other serious consequences," he said.
Mr Katz also said the three countries' ambassadors in Israel will be summoned for "reprimand talks", during which they will be shown a video of the abduction of female Israeli soldiers on 7 October.
Hamas, which controls Gaza and is currently at war with Israel, said Wednesday's announcements would be a "turning point in the international position on the Palestinian issue".
In a statement to AFP, Bassem Naim, a senior Hamas figure, said the "brave resistance" of the Palestinian people was behind the move.
Hamas's rival, the Palestinian Authority (PA) - which controls parts of the Israeli-occupied West Bank - said Norway, Spain and Ireland had demonstrated their "unwavering commitment" to "delivering the long overdue justice to the Palestinian people".
Also on Wednesday, the Israeli military approved the return of Israeli citizens to the sites of three settlements in the occupied West Bank, which they had been banned from entering since 2005.
Israel's parliament had voted to allow its citizens to return in March last year, but military permission was needed for the bill to be enforced.
Most of the international community considers the settlements illegal under international law, though Israel disputes this.
The issue of Palestinian statehood has vexed the international community for decades.
Since the 7 October attacks, Israeli Prime Minister Benjamin Netanyahu has doubled down on his opposition to such a plan, saying the creation of a Palestinian state would compromise Israel's security.
About 1,200 people were killed in the unprecedented attacks on 7 October, when Hamas gunmen burst into Israel. They took 252 others back to Gaza as hostages.
Since then, more than 35,000 people, mostly civilians, have been killed in Israel's Gaza offensive, according to the Hamas-run health ministry.
Most of the world already recognises the state of Palestine. Earlier this month, 143 of the 193 members of the United Nations General Assembly voted in favour of it joining the UN, something only states can do.
Before Wednesday's announcements, only nine European countries supported Palestinian statehood and most of those took the decision in 1988 when they were part of the Soviet bloc.Most other European countries, and the US, still believe recognition should come only as part of a long-term two-state solution to the conflict.
A White House spokesperson said US President Joe Biden was a "strong supporter" of the two-state solution, and believed "a Palestinian state should be realised through direct negotiations, not through unilateral recognition".
Slovenia and Malta have also said recently that they were considering a formal recognition.
Norway's prime minister also said on Wednesday that he hoped the recognition of Palestinian statehood by the three countries would bring renewed momentum to the peace talks.
Long-running negotiations in Cairo aimed at securing a truce and further hostage releases are currently stalled.
Meanwhile, the humanitarian situation in Gaza continues to deteriorate. Earlier this week, the UN said food distribution in the southern Gaza city of Rafah had been suspended due to a lack of supplies and insecurity.
The chief prosecutor of the International Criminal Court (ICC) recently applied for arrest warrants for Mr Netanyahu and Hamas's leader in Gaza, Yahya Sinwar, for war crimes. Both Israel and Hamas have condemned the move.
Israel says an offensive in Rafah is needed to eliminate Hamas but the international community has warned against it, saying it will greatly exacerbate the humanitarian crisis in Gaza.
Israel reacted with fury after three European countries said Wednesday they would recognise a Palestinian state, more than seven months into the devastating Gaza war.
Ireland, Norway and Spain said they would formally recognise the State of Palestine on May 28, drawing praise from many countries in the Arab and Muslim world.
Israeli Prime Minister Benjamin Netanyahu said the move amounted to a "reward for terror", after Palestinian militant group Hamas launched its October 7 attack which sparked the Gaza war.
Israel said it was recalling its envoys to Dublin, Oslo and Madrid for "urgent consultations" and also summoned the three European ambassadors for a rebuke.
Far-right National Security Minister Itamar Ben Gvir, speaking on his first visit since October 7 to the contested religious site of the Temple Mount in the Old City of Israeli-annexed east Jerusalem, said the recognition rewarded "murderers and aggressors".
His visits to the site -- known as the Al-Aqsa mosque compound to Muslims -- have been cited by Hamas leaders as one of the reasons behind the group's attack on Israel, which they called "Al-Aqsa Flood".
The White House said President Joe Biden opposed unilateral recognition of a Palestinian state, saying it should be realised "through direct negotiations".
Most Western governments, including the United States, say they are willing to recognise Palestinian statehood one day -- but not before thorny issues are settled, including on final borders and the status of Jerusalem.
But Norwegian Prime Minister Jonas Gahr Store said that "recognition of Palestine is a means of supporting the moderate forces which have been losing ground in this protracted and brutal conflict".
"In the midst of a war, with tens of thousands killed and injured, we must keep alive the only alternative that offers a political solution for Israelis and Palestinians alike: Two states, living side by side, in peace and security."
Spain's Prime Minister Pedro Sanchez said Netanyahu was "causing so much pain, destruction and resentment in Gaza and the rest of Palestine that the two-state solution is in danger".
And Irish Prime Minister Simon Harris called the October 7 attack "barbaric" but stressed that "a two-state solution is the only way out of the generational cycles of violence, retaliation and resentment".
- 'Important step' -
According to the Palestinian Authority, which rules parts of the occupied West Bank, 142 of the 193 UN member countries already recognise a Palestinian state.
The Palestine Liberation Organization, seen internationally as the sole legitimate representative of the Palestinian people, hailed the European moves as "historical".
Hamas also welcomed "an important step towards affirming our right to our land", while Bassem Naim, a senior Hamas political bureau member, said it would mark "a turning point in the international position on the Palestinian issue".
A Palestinian in war-torn Gaza's southern city of Rafah, Ismail Hassuna, 46, said the European trio's decision was a step that "will restore hope" and should help in efforts to "stop Israel from its heinous crimes".
Political analyst Ines Abdul Razek, who heads the Palestine Institute for Public Democracy, labelled the decision symbolic but said it was "not a great victory".
"What we need is actual measures, including sanctions and arms embargoes, that can stop the genocide, the erasure of our people and colonisation of our land, which Israel has been conducting with total impunity," said Abdul Razek.
Hamas's attack on October 7 resulted in the deaths of more than 1,170 people, mostly civilians, according to an AFP tally of Israeli official figures.
The militants also took 252 hostages, 124 of whom remain in Gaza, including 37 the army says are dead.
Israel's retaliatory offensive has killed at least 35,709 people in Gaza, mostly women and children, according to the Hamas-run territory's health ministry.
Israel also imposed a siege that has deprived Gaza's 2.4 million people of most water, food, medical and fuel supplies, and brought much of the population to the brink of famine.
- Deadly fighting -
Fierce fighting has raged around Rafah, the last part of Gaza to face a ground invasion, where an AFP team reported more air and artillery strikes early Wednesday.
Heavy battles have also rocked Gaza's northern and central areas where Hamas forces have regrouped, and more Israeli air strikes have hit Gaza City, Jabalia and Zeitun.
Ten people were killed in the central town of Al-Zawaida overnight, according to the Al-Aqsa Martyrs Hospital.
And Gaza's civil defence agency said six bodies were recovered from the rubble of a family house in Jabalia.
The Israeli army said later its soldiers carried out targeted raids on dozens of Hamas military compounds in Jabalia.
The World Health Organization has said northern Gaza's last two functioning hospitals, Al-Awda and Kamal Adwan, were besieged by Israeli forces, trapping more than 200 patients.
Israeli troops began their ground assault on Rafah early this month, defying international opposition over fears for the more than one million civilians trapped there.
Israel has ordered mass evacuations from the city, and the UN says more than 800,000 people have fled.
Heavy fighting has also rocked the other major Palestinian territory, the occupied West Bank, where an Israeli raid entered its second day in the city of Jenin.
Explosions and gunfire were heard from inside the Jenin refugee camp, an AFP correspondent said, after eight Palestinians were killed on Tuesday.
