A future Labor government may consult like-minded nations about recognising a Palestinian state, after the New South Wales branch of the party voted to adopt a motion critical of Israeli settlements.

The draft resolution, moved by the former foreign minister Bob Carr, was passed without debate at the NSW Labor conference in Sydney Town Hall on Saturday.

"NSW Labor welcomes the decision of the Palestinian Authority to commit to a demilitarised Palestine with the presence of international peacekeepers, including US forces," the amendment said.

"If, however there is no progress to a two-state solution, and Israel continues to build and expand settlements, a future Labor government will consult like-minded nations towards recognition of the Palestinian state."

The amendment also applauded the previous Labor government for opposing Israeli settlements on occupied Palestinian land, and for branding the settlements illegal under international law.

"NSW Labor recognises a Middle East peace will only be won with the establishment of a Palestinian state," the amendment said.

"The state of Palestine should be based on 1976 borders with agreed land swaps and with security guarantees for itself and Israel."

As foreign minister, Carr rolled the then prime minister Julia Gillard and pushed for Australia to abstain, instead of oppose, a vote that augmented Palestinian status at the United Nations.

The current federal Labor leader, Bill Shorten, was expected to address the conference on Sunday