The Israeli and Palestinian leaders Thursday stood poles apart at the UN General Assembly Thursday, clashing over the cause of their decades-old conflict and Israeli settlements in the occupied West Bank.

Israel's deadly use of force against a wave of Palestinian protests in the West Bank and Gaza has killed 230 Palestinians and 34 Israelis since last October, which analysts say has been fueled by Palestinian frustration with Israeli settlement building, fractured Palestinian leadership and zero progress on peace efforts.

Palestinian president Mahmoud Abbas, who was elected 11 years ago and whose control is limited to autonomous areas in the occupied West Bank with radical group Hamas in the Gaza Strip, took the podium first at the General Assembly, slamming Jewish settlement expansion.

"What the Israeli government is doing in pursuit of its expansionist settlement plans will destroy whatever possibility is left for the two-state solution along the 1967 borders," Abbas warned.

Shortly afterwards, and separated by just one speaker -- the prime minister of Norway -- Israeli Prime Minister Benjamin Netanyahu used the platform to directly contradict Abbas.

"This conflict has never been about the settlements or about establishing a Palestinian state," said Netanyahu.

"It's always been about the existence of a Jewish state, a Jewish state in any boundary," he added.

Israel has just secured an historic, 10-year $38 billion military aid package from the United States, drawing a line under years of fractured relations with President Barack Obama stemming partly in White House perceptions that Netanyahu is reluctant to broker peace.

Netanyahu told the General Assembly that Haifa, Jaffa and Tel Aviv, all cities in Israel, were "the real settlements they are after."

The issue of settlements in the West Bank was "real," he conceded, but said it "can and must be resolved in final negotiations, final-status negotiations."

Abbas said Palestinians were working to "exert all efforts" with Arab and other "friendly countries" to get the UN Security Council to adopt a resolution on settlements and the "terror of the settlers."

"The settlements are illegal in every aspect," Abbas said.

Netanyahu levelled extensive criticism against the United Nations for showing anti-Israeli bias but said his country was building closer relationships every day with countries in Africa, Asia and Latin America rooted in Israeli expertise in fighting terror and technology.

"Those who believe in the two-state solution should recognize both states, and not just one of them," said Abbas.

Last year the United Nations raised for the first time the Palestinian flag -- a symbolic gesture supported by the majority of UN members after the latest US peace initiative collapsed in 2014.

Palestine is not a full UN member state, though it has observer status.

"We extend our hands to those who want to build peace," said Abbas, albeit slamming Israeli attitudes.

"It is Israel's breach of the agreements it has signed and its failure to comply with the obligations that have led us to the deadlock and stalemate that we remain in now."

Israel says Palestinian incitement is the main cause of violence that has swept the region over the last year.

Washington said on August 31 that it was "deeply concerned" following an announcement that Israel had approved the construction of 463 homes for Israeli settlers in the occupied West Bank.

The approvals mostly involved new housing units, but a retroactive green light was also granted to 179 existing homes in the Ofarim settlement, said the Peace Now organization.

A recent report by the diplomatic Quartet -- the European Union, Russia, the UN and the United States -- said construction of settlements on land earmarked to be part of a future Palestinian state is eroding the possibility of a two-state solution.

*This story was edited by Ahram Online.