The government has dismissed calls for economic sanctions to be imposed on Israel in response to its policies towards the Palestinians.

Middle East Minister Tobias Ellwood said such a move would be a retrograde step and would not encourage Israel to return to the negotiating table.

Backbench MPs called for measures to be taken against Israel during a three-hour debate in Parliament on Monday. They said a major shift in British foreign policy was needed.

Mr Ellwood described Israel's domestic political situation in terms its parliamentarians would understand - as a "balagan", the Israeli term for chaos. But he rejected calls by MPs for the government to recognise a Palestinian state.

The Westminster Hall session, called after 124,000 people signed a petition for further debate on Palestine, was led by Labour MP Grahame Morris, who secured October's historic Commons vote on Palestinian statehood. He urged economic sanctions alongside an arms embargo on Israel.

More than 30 MPs spoke, with most attacking Israel and a number likening the country to apartheid South Africa.

Sir Alan Duncan, who attacked the Israeli government's settler policy in October, said responses to his comments had shown him "the Jewish voice in Israel and the UK, as elsewhere, is changing significantly in favour of a Palestinian state".

Respect MP George Galloway claimed the "ethnic cleansing of Jerusalem, the Judaisation of Jerusalem" and the situation around the al-Aqsa mosque was adding up to "a crisis about to erupt".

Former Middle East Minister Alistair Burt called on Mr Netanyahu and Palestinian leader Mahmoud Abbas to show courage and "physically stand together and say 'no more'" in order to stop the violence.