Ban Ki-moon renewed his criticism of Israel's "stifling" occupation of Palestinian territories, a day after similar hard-hitting remarks by the UN Secretary-General angered Prime Minister Benjamin Netanyahu.

The UN chief yesterday made clear that he would not retreat from the broadside he directed at Israel over its expansion of Jewish settlements in the West Bank.

UN diplomats said privately that Ban had upped the pressure on Netanyahu in a final bid to revive hopes for peace before he steps down as secretary-general at the end of the year.

"After nearly 50 years of occupation -- after decades of waiting for the fulfilment of the Oslo promises -- Palestinians are losing hope," Ban told a UN committee on Palestinian rights.

"Young people especially are losing hope. They are angered by the stifling policies of the occupation."

Netanyahu on Tuesday accused Ban of "encouraging terror" after Ban said that it was "human nature to react to occupation."

Speaking to the UN committee, Ban reiterated that "nothing excuses terror," but added that a security clampdown will not succeed in settling the Israeli-Palestinian conflict.

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Bibi vs. Ban? Israeli PM accuses settlements-slamming UN chief of backing Palestinian ‘terrorists’

Speaking before the United Nations Security Council, Secretary-General Ban said he was “deeply troubled” by new reports that the Israeli government has approved plans to build more than 150 new settlements, which he referred to as “provocative acts” by Jerusalem.

This and other activities, such as the declaration of 370 acres in the West Bank south of Jericho as “state land,” according to Ban, “are bound to increase the growth of settler populations, further heightening tensions and undermining any prospects for a political road ahead,” the UN said in a press release.

As he touched upon the volatile situation between the two states, Ban also condemned the growing number of vengeful attacks by Palestinians against Israeli citizens.

“Stabbings, vehicle attacks and shootings by Palestinians targeting Israeli civilians – all of which I condemn – and clashes between Palestinians and Israeli security forces, have continued to claim lives,” Ban said, adding that security measures are not going to help. “Palestinian frustration is growing under the weight of a half century of occupation and the paralysis of the peace process.”

Ban said that the attacks by Palestinians are a “human nature” reaction to occupation, which oppressed people have been carrying out throughout the ages, and “often serves as a potent incubator of hate and extremism.”

He also noted “the profound sense of alienation and despair driving some Palestinians – especially young people.”

“Continued settlement activities are an affront to the Palestinian people and to the international community. They rightly raise fundamental questions about Israel’s commitment to a two-state solution,” he said.

Ban used his bully pulpit to urge Israel and Palestine to “act now to prevent the two-state solution from slipping away forever,” warning that the peace process would require “difficult compromises”.

The UN chief’s remarks triggered a swift reaction from the Israeli Prime Minister, however, who accused Ban of essentially supporting terrorists.

“The secretary-general’s remarks provide a tailwind for terrorism. There is no justification for terrorism. Those Palestinians who murder do not want to build a state, they want to destroy a state and they say this openly,” Benjamin Netanyahu said.

The Prime Minister then accused Palestinians of anti-Semitism, which he believes is the main motive of anti-Israeli attacks, rather than Israel’s controversial policies.

“They want to murder Jews for being Jews and they say this openly. They do not murder for peace and they do not murder for human rights,” he said, while also accusing the UN of bias.

“The United Nations long ago lost its neutrality and its moral force, and the secretary-general’s remarks do not improve its standing,” Netanyahu added.

In New York, Israel’s ambassador to the UN, Danny Danon, also criticized the UN chief, accusing him of “supporting terrorism instead of fighting it.”

“It’s unacceptable to support terrorism, no matter what the reason,” Danon said.