The White House said on May 22 it opposed "unilateral recognition" of a Palestinian state after Ireland, Norway and Spain announced they would establish relations but warned Israel against withholding funds in retaliation.
President Joe Biden "has been on the record supporting a two-state solution," his National Security Advisor, Jake Sullivan, told reporters.
"He has been equally emphatic on the record that that two-state solution should be brought about through direct negotiations through the parties, not through unilateral recognition," he said.
He stopped short of criticizing the decision to formally recognize the State of Palestine by the three European countries, all close allies of the United States.
"Each country is entitled to make its own determinations, but the U.S. position on this is clear," Mr. Sullivan said.
Israel has responded angrily, including by withdrawing envoys, with Prime Minister Benjamin Netanyahu accusing the European nations of offering a "reward for terror."
Far-right Israeli Finance Minister Bezalel Smotrich told Mr. Netanyahu that he wants to take retaliatory action including severing an arrangement in which Norway handles funds intended to the Palestinian Authority.
Under peace agreements brokered in part by Norway in the 1990s, Israel collects money for the Palestinian Authority, which exercises limited autonomy in parts of the West Bank.
But Israel has blocked transfers since the aftermath of the October 7 attacks by Hamas, which runs the Gaza Strip.
Mr. Sullivan said that funds should keep going to the Palestinian Authority which the Biden administration wants to strengthen in hopes it can assume control of Gaza from Hamas.
"I think it's wrong on a strategic basis, because withholding funds destabilizes the West Bank," Mr. Sullivan said of Israeli moves to stop funds.
"It undermines the search for security and prosperity for the Palestinian people which is in Israel's interests, and, I think, it's wrong to withhold funds that provide basic goods and services to innocent people," he said.
Mr. Biden and Secretary of State Antony Blinken have been pushing Israel to move forward on a timeline for a Palestinian state, in part by dangling the prospect of Saudi Arabia normalizing relations with Israel.
But Washington vetoed a recent UN Security Council bid to recognize the State of Palestine, saying that recognition could only come through negotiations that take into account Israel's security interests.
