The Vatican "welcomed with favor" the U.N.'s vote to allow Palestine to become a non-member Observer State, and pressed for a permanent two-state solution.
The statement came one day after the U.N.'s General Assembly voted resoundingly for the change on Nov. 29.
"The vote manifests the sentiment of the majority of the international community and recognizes a more significant presence for Palestinians within the United Nations," said the Holy See.
"But this doesn't constitute a sufficient solution to the region's existing problems," it added in a Nov. 30 press release.
"They can only find an adequate response through an effective commitment to building peace and stability, in justice and in the respect for legitimate aspirations, both of the Israelis and of the Palestinians," the Vatican said.
The decision means Palestinians will be able to participate in U.N. debates and possibly join some of its bodies like the International Criminal Court.
But the change was not universally welcomed. Israeli Prime Minister Benjamin Netenyahu’s spokesman, Mark Regev, said this is "negative political theater that will take us out of the negotiating process."
The Holy See press office called this an ''important decision'' and said it had “actively followed the steps that led to it, while striving to remain neutral and act in accordance with its particular religious nature and universal mission, and in consideration also of its specific attention to the ethical dimension of international problems.”
Pope Benedict XVI visited the region in 2009 and appealed for a two-state solution and an end to violence.
"No more bloodshed! No more fighting! No more terrorism! No more war! Instead let us break the vicious circle of violence," he said at the end of his trip.
"Let there be lasting peace based on justice, let there be genuine reconciliation and healing," said Pope Benedict. "Let the two-state solution become a reality, not remain a dream.”
The Holy See’s Secretary for Relations with States, Archbishop Dominique Mamberti, told the U.N.'s General Assembly last year he hoped it would adopt a decision that would help concretely apply the Pope's appeal.
The Holy See said it believes that the U.N.'s vote recognizing Palestine as an observer state should help give a definitive answer to a 1947 General Assembly resolution on the Israeli-Palestinian situation.
"This document," the Holy See explained, "laid the legal basis for the existence of the two states, of which one has not been implemented for 60 years, while the other has now seen the light."
The Vatican delegation also noted that it has made an urgent international appeal to increase commitment and adopt initiatives "to help achieve a lasting peace that respects the rights of Israelis and Palestinians."
The Latin Patriarchate of Jerusalem thanked the Holy See for its Nov. 30 statement and congratulated Palestinians and their president, Mahmoud Abbas, calling him a "moderate man" and a "man of peace."