After the Palestinian Declaration of Independence on 15 November 1988, Sri Lanka and the Maldives were among the first few countries in the world to recognize the State of Palestine.

After Sirimavo Bandaranaike came to power, the Israel embassy was closed down despite many threats by lobbies in the United Kingdom to boycott Sri Lankan tea.

[5] Shortly after closing down the Israel embassy, Sirimavo Bandaranaike invited the PLO to establish diplomatic ties with Sri Lanka.

[9] In January 2024, President Ranil Wickremesinghe affirmed Sri Lanka's support for a two-state solution to the ongoing Israeli–Palestinian conflict.

[11][12] Sri Lanka strongly opposed the decision by US President Donald Trump to recognise Jerusalem as the capital of Israel.