UNITED NATIONS: Israel suffered back-to-back diplomatic setbacks in Europe on Wednesday, while the Palestinians at the United Nations set a deadline for an Israeli withdrawal from lands captured nearly 50 years ago by the end of 2017.

In Geneva, the international community delivered a stinging rebuke to Israel's settlement construction in the West Bank and east Jerusalem, saying the practice violates Israel's responsibilities as an occupying power.

The declaration adopted by the conference of the Fourth Geneva Convention, which governs the rules of war and military occupation, emphasised a prohibition on colonising occupied land and insisted that international humanitarian law be obeyed in areas affected by the conflict between Israel and Palestinians.

It called for “all serious violations” to be investigated and those responsible for breaches to be brought to justice.

“This is a signal and we can hope that words count,” said Swiss ambassador Paul Fivat, who chaired the one-day meeting.

The US and Israel did not take part.

Israel's UN Mission blasted the gathering, saying: “It confers legitimacy on terrorist organisations and dictatorial regimes wherever they are, while condemning a democratic country fighting terrorism in accordance with international law.”

In Luxembourg, meanwhile, a European Union court ordered the Palestinian group Hamas removed from the EU terrorist list for procedural reasons but said the 28-nation bloc can maintain asset freezes against Hamas members for now.

The Islamic militant group, which calls for the destruction of Israel, hailed the decision, but Israeli Prime Minister Benjamin Netanyahu expressed outrage.

“It seems that too many in Europe, on whose soil 6 million Jews were slaughtered, have learned nothing,” Netanyahu said, adding that Israel would continue to defend itself “against the forces of terror and tyranny and hypocrisy.”

The EU court ruled that the terrorist listing of Hamas was based on press and Internet reports and not on “acts examined and confirmed in decisions of competent authorities."

The EU, which has two months to appeal, was considering its next step. In New York, an Arab-backed draft resolution on ending Israel's occupation of lands captured in 1967 was submitted Wednesday evening to the UN Security Council for a possible vote, Palestinian Ambassador Riyad Mansour said.

However, Mansour said the Arab-backed resolution does not close the door on further negotiations on the issue, including with the United States, “if they are ready and willing.”

The US, as a permanent council member, often has vetoed measures targeting Israel in the past. And Palestinian Foreign Minister Riad Malki earlier said the actual vote might be put off, suggesting a compromise is in the works to avoid a clash in the council.

The draft, sponsored by Jordan on behalf of the Palestinians, sets the end of 2017 as a deadline for an Israeli withdrawal from war-won lands the Palestinians are seeking for a state. The deadline has been pushed back from that of November 2016 in the earlier draft.

Israel fiercely opposes any suggestions that the Security Council can set a framework for Israeli-Palestinian negotiations, which broke down again in the spring after the two sides couldn't agree on the ground rules.

The resolution also welcomes the idea of holding an international conference to launch negotiations on reaching a peace agreement.

The United States was scrambling Wednesday to avert a showdown at the Security Council.

US Secretary of State John Kerry was talking to European and Arab foreign ministers about a potential meeting this weekend in the Mideast, possibly with Palestinian President Mahmoud Abbas.

In Washington, State Department spokeswoman Jen Psaki said the Obama administration is studying the EU's court decision but the US continues to consider Hamas as a terrorist organisation.

The US hasn't said how it would respond to the Jordanian resolution, but Kerry took a hard line in meetings this week in Europe against any effort that could interfere with Israel's elections in mid-March.

“We want to find the most constructive way of doing something that therefore will not have unintended consequences, but also can stem the violence,” Kerry told reporters in London on Tuesday.

He said the situation marks “a particularly sensitive moment” given rising tensions between Israel and Palestinians.

Israel did one win diplomatic engagement in Europe on Wednesday, this one at the European Parliament. The lawmakers meeting in Strasbourg, France, stopped short of pushing for an outright recognition of a Palestinian state, urging renewed peace talks instead.

Legislators voted 498-88 in favor of a compromise resolution supporting “in principle recognition of Palestinian statehood” — but as part of a two-state solution with Israel.

The resolution supports two states on the basis of 1967 borders, with Jerusalem as the capital of both.