Palestinian President Mahmoud Abbas reads notes during meeting in Ramallah on Saturday (AFP)
The Palestine Liberation Organisation's top leadership opened the way to suspending its recognition of Israel on Saturday, but stopped short of ordering the drastic measure immediately.
Withdrawing the PLO's 1988 recognition would threaten decades of Israeli relations with the moderate Palestinian leadership and raise doubts over security coordination between the two.
It would also be seen as a fatal blow to the two-state solution, already on life support since the White House's recognition of Jerusalem as Israel's capital in December.
The PLO's Executive Committee released a statement after a three-hour meeting on Saturday saying it would set up a committee to study the move.
The committee also decided in its meeting in Ramallah to seek action against the Israeli occupation in the United Nations Security Council, the General Assembly and the International Criminal Court (ICC), according to the Palestinian News Network (PNN)
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The committee decided to request the ICC to start a judicial inquiry into Israeli settlements, racial discrimination and the ongoing ethnic cleansing in and around Jerusalem, the Jordan Valley and the area south of Hebron, the PNN reported.
It said the aim of the request is to hold Israeli politicians and military and security officials accountable and bring them before international justice in accordance with the Rome Statute of the ICC, which considers settlements as a war crime.
The organisation's top body was meeting for the first time since the Palestinian Central Council, another arm of the PLO, called for the step last month.
The executive committee on Saturday urged the Palestinian Authority of President Mahmud Abbas to "immediately start preparing plans and projects for disengagement steps with the Israeli occupation government at the political, administrative, economic and security levels."
Trump ties cut
The Palestinian leadership has become increasingly frustrated with the American administration, particularly since US President Donald Trump's controversial recognition of Jerusalem as capital of Israel, in a break with decades of international consensus that the city's fate should be decided in peace talks.
The Palestinians, who also see the city as their capital, cut off ties with Trump and said his decision had placed in jeopardy their relations with Israel.
Last month the PLO's Central Council called on the Executive Committee to suspend recognition of Israel until it recognises the state of Palestine and halts the building of Jewish settlements on occupied Palestinian land.
Western countries have been lobbying senior Palestinian officials to convince them not to take such a step, multiple diplomats said