ISRAEL'S discrimination between Jewish settlers and Palestinians in the West Bank is increasingly reminiscent of white South Africa's apartheid system, an Israeli human rights group said.

Jewish settlements in the Palestinian territory "have created a situation of institutionalised discrimination and segregation,'' the Association for Civil Rights in Israel said.

"The discrimination in services, budgets and access to natural resources between the two groups in the same territory constitutes a stark violation of the principle of equality, which (is reminiscent) in many and increasing ways (of) the apartheid regime that was applied in South Africa,'' ACRI said.

The group's report, published ahead of Wednesday's 60th anniversary of the signing of the Universal Declaration of Human Rights, notes that the 2.3 million Palestinians in the West Bank outside annexed Arab east Jerusalem are subject to military law and administration.

By contrast, the 250,000 settlers live under Israeli civilian law.

While the settlers use a modern and developed road system restricted to Israeli cars, the Palestinians are forced to use ``winding and dangerous roads,'' the report said.

In addition, Israel imposes strict restrictions on construction in Palestinian towns and villages and does not develop basic infrastructure there.

The report cited UN figures showing that some 65 percent of roads leading to the 18 most populous Palestinian West Bank towns are blocked or controlled by military checkpoints. The United Nations says more than 600 roadblocks impede Palestinian movement around the West Bank.

The question is among the key issues in US-backed efforts to bolster Palestinian president Mahmud Abbas's rule as part of the sluggish Middle East peace launched late last year.

"The travel restrictions hamper the transportation of sick people and medical staff to hospitals. There is a shortage in medicine and medical supplies,'' the report said.

In comparing the system with apartheid, ACRI did point out that "in South Africa the criteria was racially based unlike the ethnic-national criteria applied in the territories.''

The report also decried the economic situation of Palestinians in the Gaza Strip, where Israel has imposed a crippling blockade since the Islamist Hamas movement seized power in June 2007.

"The blockade policy has almost completely destroyed the industry. Unemployment and poverty are surging... The blockade caused the collapse of local authorities that are struggling to provide residents basic services such as water, sewage and sanitation.''