Israeli Prime Minister Benjamin Netanyahu told Secretary of State Tony Blinken last week that a direct or indirect U.S. recognition of a Palestinian state "would be a prize for those who planned and orchestrated the Oct. 7 massacre," two Israeli officials told Axios.

Why it matters: Such recognition by the U.S. would change decades of American policy that advocated for a Palestinian state only as a result of direct negotiations with Israel. The Israeli government is increasingly concerned if that happens, it would put more pressure on Israel to accept a Palestinian state.

• Ultranationalist ministers in Netanyahu's cabinet are pushing to preempt any such U.S. move by passing a cabinet resolution that would officially determine that Israel's policy opposes a Palestinian state — a step the Israeli prime minister has refrained from taking so far.

Driving the news: The U.S. post-war strategy has so far centered on linking possible normalization between Israel and Saudi Arabia to the creation of an "irreversible" creation of a pathway to a Palestinian state.

• At the same time, some in the Biden administration are also now thinking recognition of a Palestinian state should possibly be the first step in negotiations to resolve the Israeli-Palestinian conflict instead of the last, the senior U.S. official previously told Axios.

Blinken recently asked the State Department to conduct a review and present policy options on possible U.S. and international recognition of a Palestinian state after the war in Gaza, Axios reported two weeks ago.

• The State Department stressed there has been no change in policy and said the review was part of an ongoing process of looking into different policy options.

There are several options for U.S. action on this issue, including:

• Bilaterally recognizing the state of Palestine.
• Not using its veto to block the UN Security Council from admitting Palestine as a full UN member state.
• Encouraging other countries to recognize Palestine.

Behind the scenes: Netanyahu raised the possible U.S. recognition of the state of Palestine in his private meeting with Blinken in Jerusalem last week, expressing dismay that the U.S. was even considering such an option, according to the Israeli officials.

• Netanyahu made clear to Blinken that such a U.S. move would be "an own goal" and would harm any effort by the Biden administration to broaden the circle of peace and normalization in the region, one Israeli official said.
• "It will be a prize to the Palestinians for doing Oct. 7," Netanyahu told Blinken, per the Israeli officials.
• The Israeli Prime Minister's Office and the State Department declined to comment.

The issue also came up during a meeting between Netanyahu's national security adviser, Tzachi Hanegbi, and Palestinian minister Hussein al-Sheikh who is one of President Mahmoud Abbas' closest confidants.

• Hanegbi made it clear to al-Sheikh "there is no chance this war will end with a two-state solution," a senior Israeli official told Axios.
• He also stressed that Israel will not change a decades-long policy now and give a prize to the perpetrators of Oct. 7, the Israeli official said.
• "It is not only the Likud government. There was no Palestinian state when we had other governments in Israel so you need to be realistic and put forward more practical goals for the day after the war," Hanegbi told al-Sheikh.

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