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"This decision brings more questions than answers, especially regarding its timing, after Hamas committed the worst atrocity against Jewish people since the Holocaust," the statement added.
"Our political leaders have decided the reward for Palestinian terrorism should be the recognition of a Palestinian state.
Israel recalled its ambassador to Ireland in response to the country's planned recognition of a Palestinian state and claims the move encourages terrorism and further instability.
"Unilateral gestures such as this will do nothing for either Palestinians or Israelis. We can only resolve our differences through bilateral negotiation," the statement added.
"It is about believing that a two-state solution is the only way for Israel and Palestine to live side by side in peace and security," he said.
"We had wanted to recognise Palestine at the end of a peace process however we have made this move alongside Spain and Norway to keep the miracle of peace alive.
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"I have two reactions to this. First is my personal reaction: for the most part it is a positive reaction - there is a realisation that we are part of the solution to the war. But it does feel out of place for now," he said.
In a statement on Tuesday, the Irish government said it recognised "Palestine as a sovereign and independent state and agreed to establish full diplomatic relations between Dublin and Ramallah".
The Ireland Israel Alliance is a non-profit organisation based in Dublin, which says it aims to "bring clarity to public perception of issues surrounding the Israeli-Palestinian conflict" and "ensure such issues receive fair and impartial treatment within the Irish media".
The Republic of Ireland has officially recognised a Palestinian state - a move which the taoiseach (Irish prime minister) has described as "important and historic".
"Then there is my professional reaction. The Irish government has recognised a Palestinian state but Palestinian students are being told they cannot remain here when they finish their studies.
"Today is a very sad day for Ireland-Israel relations and indeed for the nation of Ireland, as almost eight months since the horrors of 7 October," it said in a statement.
However, it is understood a Palestinian embassy - considered an upgrade from the existing mission - is to open in Dublin in the coming week, while Dublin will send an ambassador to represent Ireland to the Palestinian people.
It said the move suggested to Hamas that "terrorism pays" and that it would jeopardise the potential release of Israeli hostages in Gaza.
The Irish Ambassador to Israel Sonya McGuinness was summoned to the Israeli Foreign Affairs Ministry in Jerusalem and reprimanded.
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Both Hamas and its rival, the Palestinian Authority, have welcomed the recognition. The Palestinian flag has now been raised at Leinster House, the seat of the Irish parliament.
Former Irish justice minister Alan Shatter, who is Jewish, said there had been a "continuing escalation of anti-semitism" in Ireland since 7 October, when Hamas attacked Israel and killed about 1,200 people.
"The Ireland Israel Alliance opposes the recognition of a Palestinian state as do so many others here in Ireland, including the vast majority of Ireland's beleaguered Jewish community."
"Ireland’s declaration of recognition of our right to statehood is an important statement to the international community," she said.
"I again call on Prime Minister Netanyahu of Israel to listen to the world and stop the humanitarian catastrophe we are seeing in Gaza."
Mr El-Estal, who now lives in Dublin with his children, told BBC News NI the decision to recognise a Palestinian state was a "great step".
Khalid El-Estal was born in Belfast and attended primary school in the city. His family relocated to Gaza when he was aged eight.
Zaid Al-Barghouthi, who is a vice-president for campaigns in the Union for Students in Ireland, said he had mixed feelings about the move.
In a statement, the Embassy of Israel in Dublin said it was disappointed by Ireland's recognition of a Palestinian state.