Israeli Prime Minister Benjamin Netanyahu has rejected the idea of a Palestinian state with pre-1967 borders, saying it would lead to “Hamas 400 metres from my home”.

Mr Netanyahu told Israel’s Channel 2: “When they say, 'Go back to the 67 lines,' I stand against. When they say, 'Don't build in Jerusalem,' I stand against."

Right-wing Likud Knesset candidate Moshe Feiglin outlined a plan on Tuesday to pay families in the West Bank $500,000 each to emigrate.

Palestinian Authority President Mahmous Abbas has criticised Hamas leader Khaled Mashaal for saying that the terrorist organisation would never recognise the state of Israel, a Turkish newspaper has reported.

For two decades, the parcel of land known as E-1 has become a symbol for all sides in the Israeli-Palestinian conflict. For the Israeli right, E-1 is a vital neighbourhood in Greater Jerusalem that must be built to stop illegal Arab building around the eternal capital of the Jewish people.

British officials may now support the Palestinian United Nations bid in return for promises from President Mahmoud Abbas not to pursue Israel for war crimes and to resume the peace process.

Whitehall officials have said that Britain will vote “yes” on an upgrade for the Palestinian Authority to non-member observer status on three conditions, when the vote is held on Thursday.

Hundreds of protesters crowded the streets of South Kensington, close to the Israeli Embassy, on Thursday night in two demonstrations – one shouting “Free Palestine”, the other singing “Od Avinu Chai”.