"We must pave the way for peace," the summit host, French President Emmanuel Macron, said on Monday.
"Today, France, recognises the state of Palestine."
While the event, convened by France and Saudi Arabia, could boost the morale of Palestinians in their long search for statehood, it is not expected to deliver change on the ground.
The most far-right government in Israel's history has declared there will be no Palestinian state as it pushes on with its fight against militant group Hamas in Gaza following the October 7, 2023, attack on Israel that killed some 1200 people.
Israel has become increasingly isolated and drawn global condemnation over its military conduct in Gaza, where more than 65,000 Palestinians have been killed, according to local health authorities.
In recent weeks, Israel has begun a long-threatened ground assault on Gaza City with few prospects for a ceasefire.
Andorra, Belgium, Luxembourg and San Marino were also expected to recognise a Palestinian state on Monday ahead of this week's UN General Assembly, after Canada, Portugal and others did so at the weekend.
Malta made the announcement earlier on Monday.
Israel has said such moves will undermine the prospects of a peaceful ending to the conflict in Gaza.
The two-state solution was the bedrock of the US-backed peace process ushered in by the 1993 Oslo Accords.
The process suffered heavy pushback from both sides and has all but died.
No such negotiations over a two-state solution have been held since 2014.
The United States and Israel boycotted Monday's meeting.
Israel's UN Ambassador Danny Danon said Israel would discuss what action to take in response to the announcements of recognition after Prime Minister Benjamin Netanyahu returns to Israel next week.
"Those issues were supposed to be negotiated between Israel and the Palestinians in the future," he told reporters ahead of the meeting.
The United States has told other countries that Palestinian recognition will create more problems, Secretary of State Marco Rubio said earlier this month.
Amid Israel's intensified Gaza offensive and escalating violence by Israeli settlers in the West Bank, there is a growing sense of urgency among some nations to act now before the idea of a two-state solution vanishes forever.
France has driven the move, hoping that Macron's announcement in July that he would recognise a Palestinian state would give greater momentum to a movement hitherto dominated by smaller nations that are generally more critical of Israel.
A delegation representing the State of Palestine has observer status at the United Nations - but no voting rights.
No matter how many countries recognise Palestinian independence, full UN membership would require approval by the Security Council, where the US has a veto.
While the majority of European countries now recognise a Palestinian state, two of the continent's largest economies, Germany and Italy, have signalled they are unlikely to make such a move soon.
Germany — long a strong supporter of Israel because of its responsibility for the Holocaust — has grown more critical of Israeli policy, while insisting that recognition of a Palestinian state should come at the end of a political process to agree on a two-state solution.
The German government spokesperson also said on Monday that there must be no further annexations in Israeli-occupied territory.
Italy said recognising a Palestinian state could be "counterproductive".
On the ground, Prime Minister Benjamin Netanyahu has rejected numerous calls to end the campaign until Hamas is destroyed and has said he will not recognise a Palestinian state.
