Senator Payne said the Australian government was a longstanding supporter of a two-state solution, in which Israel and a future Palestinian state coexist in “peace and security, within internationally recognised borders”.
“We urge all parties to refrain from actions that diminish the prospects for a negotiated two-state solution, including acts of violence and terrorism including rocket attacks on civilians and land appropriations, demolitions, and settlement activity,” she said.
Senator Payne said she was following “with concern” possible moves towards the unilateral annexation or change in status of territory on the West Bank.
“The focus needs to be on a return to direct and genuine negotiations between Israel and the Palestinians for a durable and resilient peace arrangement, as soon as possible,” Senator Payne said.
She said Australia had raised its concerns with Israel in relation to indications of annexations and she had done so directly Israeli counterpart Gabi Ashkenazi.
Mr Netanyahu signalled on Tuesday that his July 1 deadline would pass without taking any action after meeting with White House envoy Avi Berkowitz and US Ambassador to Israel David Friedman.
He said they “spoke about the question of sovereignty, which we are working on these days and we will continue to work on in the coming days”.
The Jerusalem Post reported on Wednesday that the Trump administration had urged Israel to “slow down the process” following months of meetings between Mr Netanyahu and the US Middle East peace team anchored by Jared Kushner, Friedman and Berkowitz.
The Trump administration’s plan, released in January, gave Israel the green light to add West Bank lands to its map in a future two-state solution with the Palestinians.
The Palestinians would get about 70 per cent of the West Bank and Israel would annex the rest.
Mr Gantz, the defence minister and alternate prime minister, said on Monday any annexation of West Bank territory must be placed on hold until the coronavirus crisis has been contained.
French news agency AFP reported on Tuesday a four-page letter from the Palestinian Authority sent to the so-called Quartet – the diplomatic grouping of the United States, the United Nations, the European Union and Russia — said it was “ready to resume direct bilateral negotiations where they stopped”.
The letter said the counter-proposal would be withdrawn if Israel went ahead with annexation “of any part of the Palestinian territory”, according to the report.
UN High Commissioner for Human Rights Michelle Bachelet said on Monday any Israeli plans to apply sovereignty to parts of Judea and Samaria would be “illegal”, irrespective of whether it included all or only some of the settlements.
Rob Harris is the National Affairs Editor for The Sydney Morning Herald and The Age, based at Parliament House in Canberra