When Jonathan Lichtenstein's play, Memory, arrived in New York, some Jews were so outraged they walked out of the theatre. Others gave a standing ovation.

Perhaps this is a predictable response to a work that effortlessly connects pre- and post-war Berlin with modern-day Bethlehem. Memory also depicts how Jews were treated in Germany before the war and the way many Palestinians are treated by Israel now.

It is impossible to avoid the conclusion that comparisons are being made. Especially with a play that contains the line, spoken by a Palestinian: "We are the Jews of the Middle East" - which might explain the walkouts.

"My original story was just set in 1930s and 1990s Berlin," says Lichtenstein on a windy terrace outside the National Theatre - although it is North London's Pleasance Theatre where the play arrives at the end of this month.

Lichtenstein says he feels "compelled to write. I mean, if I said to you that, as I went to sleep, this voice kept saying to me write this down, write this down - that's really how it happens."

Some context is needed. Memory, which is directed by one-time RSC artistic director Terry Hands, started life at Theatre Clwyd Cymru in 2006 before a run in New York.

In this play-within-a-play, Lichtenstein's characters are actors rehearsing the roles for a drama that opens in an East Berlin apartment, just after the Berlin wall came down. It is the home of an elderly lady who is persuaded by her grandson to recall how she saved two Jewish boys from the Shoah, and how the Nazis stole her husband's business before he killed himself.

The story also veers to and from Bethlehem, where an Israeli soldier is enforcing an order for an elderly Palestinian man's home to be destroyed to make way for the security wall.

So is Lichtenstein seriously linking Palestinian suffering at the hands of Israel with Jewish suffering at the hands of the Nazis? Or, put another way, is he comparing Israel with Nazi Germany? It is a question that makes the Welsh playwright bristle.

"The word ‘link' is so loaded," he says with indignation. "We are used to dealing in precise lines; arguments on this side of the barrier and on that side."

The answer sounds evasive for a play that is so straightforwardly political. But Lichtenstein does not see his play as primarily a political work - rather, a psychological one. "Have you come across this notion of trans-generational trauma? Well I think that's what the play is about, really. My father was a kindertransport." He is referring to the way suppressed trauma in one generation, such as his father's, can be expressed by the next, such as his own.

Lichtenstein's answer continues in broken sentences and hesitant phrases, punctuated by thoughtful pauses. "I've had to contend with New York Jews, so that's why I'm somewhat wary," he says.

"My family had shops in Berlin so I know about the property laws," says the 51-year-old playwright.

And it is becoming clear that this, the seizure of property, is an aspect of Jewish and Palestinian suffering where the author sees a valid parallel. His play dramatises how a Berlin a Jewish business is stolen by the Nazis, and how in modern-day Bethlehem, the home of an innocent Palestinian is destroyed to make way for Israel's security wall. "I'm not saying it's is the same as the 1940s. I am suggesting that property laws are important and people should be careful," he says.

It is also worth pointing out that those who walked out of the play in New York would have missed a crucial scene that leaves the audience in no doubt of the difference between Israel and Nazi Germany. "The Holocaust is not the same as what's going on in Palestine," says Lichtenstein.

Pleasance Theatre, London N7; 020 7609 1800