Israel approves economic 'concessions' for Palestinians

Israel has authorised several economic measures for the Palestinians that were requested by Donald Trump, hours before the US president begins a visit in which he hopes to revive peace talks frozen since 2014.

But at the same time, Prime Minister Benjamin Netanyahu's Security Cabinet - a forum of senior ministers - voted to establish a committee to examine legalising Jewish settlement outposts built without formal approval in the occupied West Bank.

The committee to examine legalising Israeli outposts would work for three years, although its exact mandate was still to be defined, the cabinet statement said.

Over decades, settlers have built scores of hilltop outposts without receiving government approval.

Israeli settlements, including those built with official Israeli state sanction, are considered illegal under international law.

"The security cabinet has approved economic measures that will ease daily civilian life in the Palestinian Authority after [Trump] who arrives tomorrow, asked to see some confidence-building steps," the cabinet statement said.

The measures include the building of two industrial zones at Jalameh in the northern West Bank and Tarqumiyeh in the south and would keep the Allenby Bridge crossing that connects the West Bank and Jordan open 24 hours a day.

There would also be reforms to Palestinian land use in urban areas in the 60 percent of the West Bank under full Israeli control.

He did not elaborate but Israel's Haaretz daily said the intention was to allow construction of "thousands of Palestinian homes" in the area where for years it has been almost impossible for Palestinians to get Israeli permits to build on their own land.

Trump arrives in Israel on Monday, the second stop in an eight-day foreign tour that began in Saudi Arabia over the weekend, and he will meet with Netanyahu.

On Tuesday, he will go briefly to the West Bank to see Palestinian President Mahmoud Abbas and will later speak in Jerusalem before heading to Rome and then Brussels.

"These are concessions ahead of Trump's visit that do not harm Israel's interests," an Israeli diplomatic source told Reuters news agency.

Israel said it would also ease restrictions on Palestinian construction in areas where it retains overall control, but that abut Palestinian urban areas.

The Jerusalem question

The Palestinians want to establish a state in the West Bank and in the Gaza Strip, with East Jerusalem as its capital.

But earlier in the day on Sunday, Netanyahu told a large crowd that Jerusalem will always be the capital of Israel.

"Tonight, I say to the whole world and in the clearest way possible, Jerusalem was and will always be the capital of Israel," Netanyahu said, during festivities to mark the 50th anniversary of Israel's conquest of East Jerusalem in the 1967 war.

"The Temple Mount and the Western Wall will always remain under Israeli sovereignty," Netanyahu said.

The Western Wall is the last remnant of the supporting wall of the second Jewish temple, built by King Herod and destroyed by the Romans in 70 AD.

The holiest site where Jews can pray, it is in the Old City of East Jerusalem, which Israel occupied in 1967 and later annexed in a move not recognised by the international community.

It is situated below the Al-Aqsa mosque compound, Islam's third holiest site, referred to by Jews as the Temple Mount.