The gov will be shooting themselves in the foot if this is true... Crazy!
Our formal stance was that we will acknowledge and normalize relations with Israel, provided that the 2-State solution be implemented with Jerusalem (or at least the eastern part) as the Palestinian capital.
Seems like there's a lot of pressure to our gov regarding this issue recently... and the pressure is probably not only from traditional Israeli allies such as the US and Europe, but also likely from Arab states like Saudi Arabia and UAE... Even Pakistan seems to be under pressure to recognize Israel too...
Well... perhaps F-35s are no longer a distant dream in this case..