A Israeli draft bill ranking Jerusalem as a national priority zone has enraged the Palestinian National Authority (PNA).

The law encourages young Israelis to move to the city to benefit from a series of economic, education and social development plans.

Saeb Erekat, the chief Palestinian negotiator, said the law is another step forward to declare Jerusalem as Israel's undividable capital.

The Palestinians claim the eastern part of Jerusalem as a capital for their future state.

Erekat noted that annexing the city to the Jewish state, which has been occupied by Israel since the 1967 war, "is illegible and won't be recognized."

The relevant UN resolutions, international law and Geneva Conventions define Jerusalem as an occupied territory, the veteran negotiator stressed.

The legislative bill on Jerusalem is a new challenge to the United States, which attempts to push forward the stalled peace talks in the Middle East, Erekat added.

"This is a proof that the Israeli government selected settlements instead of peace," he said, referring to a decision to resume building Jewish settlements in the West Bank.

The bill, which is to be ratified soon by Israeli Knesset, comes amid the stagnant Palestinian-Israeli peace talks suspending shortly after it restarted in Sept. 2, over a dispute on resuming settlement constructions.