Egypt has announced that it rejects a newly passed Israeli law that defines Israel as "the nation-state of the Jewish people" and states that only Jews have the right of self-determination in the country.

In a statement released on Saturday, the Egyptian foreign ministry said that the new Jewish state law, which was passed by the Israeli Knesset on Thursday, solidifies the concept of occupation and apartheid.

The law also defines the establishment of Jewish communities as being in the national interest and downgrades Arabic from an official language to one with special status.

The Egyptian foreign ministry said that the new law undermines the chances of achieving peace in the Middle East or reaching a fair solution in the Palestinian issue.

“The law can possibly undermine the right of Palestinian refugees to return, which is a right that has been internationally recognised and cannot be dismissed,” the statement read.

The ministry also said that the law's assertion that Jerusalem is the "complete and unified" capital of Israel has dangerous implications on the prospects for a fair resettlement for Palestinians and reviving talks between the Palestinians and Israelis.

Egypt has repeatedly voiced its support for a two-state solution based on the 1967 borders with East Jerusalem as the capital of the Palestinian state.

The Egyptian foreign ministry also demanded that the international community preserve the historical and legal rights of the Palestinian people and to work on restoring peace talks between Palestinians and Israelis as well as supporting the two-state solution.