Israel has reacted angrily to Argentina's recognition of a Palestinian state within 1967 borders.
Monday's move by Argentina comes days after a similar step by South American neighbour Brazil.
The Argentinian foreign ministry said recognition was in line with the Palestinians' right to build an independent state.
More than 100 states around the world recognise Palestine, their mission at the United Nations says.
"The time has come to recognise Palestine as a free and independent state," Foreign Minister Hector Timerman said, adding that Argentina was "frustrated" that peace talks had stalled.
Brazil recognised Palestine on Friday, and Uruguay said it would do the same next year. Costa Rica, Cuba, Nicaragua and Venezuela have already done so.
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