Palestinian politicians and rights groups have condemned a proposal by Israeli Prime Minister Benjamin Netanyahu to transfer some Arab-populated villages to the Palestinian Authority's control and strip residents of their citizenship.

The plan, which was first reported last week by Israel's Channel Two News, was supposedly relayed to American officials. It would also permit Israel to annex Jewish-only settlements in the occupied West Bank as part of a final agreement with the Palestinian leadership.

"The issue didn't come up as a separate proposal, but as part of a proposal for a comprehensive arrangement with the Palestinians," one official told Channel Two, as reported by the Israeli daily Haaretz.

Yousef Jabareen, a legislator in Israel's Knesset, described both the forced population transfer and the annexation of settlements - considered illegal under international law - as "war crimes".

"Arab citizens of Israel were not granted citizenship by grace, but by the fact that they live in their historical homeland," he told Al Jazeera.

"This is in stark contrast to the settlers of the West Bank, who are illegally occupying lands they stole by force from their Palestinian owners."

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