Israeli President Shimon Peres on Wednesday warned about the demographic consequences of ongoing Jewish settlement in the occupied West Bank, in comments carried on Israel's main radio stations.

"Israeli settlements in densely populated Arab areas could bring about a demographic change about which we would do well to think hard about before acting," he said in remarks broadcast on both army radio and Israel public radio.

"Without a Jewish majority, it is doubtful whether a Jewish state can remain Jewish," he warned during a ceremony held on Tuesday evening.

His remarks were alluding to demographic consequences of a possible annexation of the West Bank, an issue which came up earlier this week with the publication of a report which found that Jews "have the legal right" to settle in the West Bank.

Projections show Israel is rapidly losing the "demographic battle" against the Palestinians who are set to outnumber Jews in the area between the Jordan River and the Mediterranean within a matter of years.

Official statistics show there are currently some 5.9 million Jews living in Israel and the occupied territories, compared with 5.8 million Palestinian Arabs -- which include 1.6 million Arab Israelis, 2.6 million Palestinians in the West Bank and east Jerusalem and another 1.6 million in Gaza.

The report, which was written by three prominent Israeli jurists, rejected the idea that Israel was a "military occupying power" in the West Bank and said the establishment of settlements there "cannot be considered illegal" in conclusions which completely contradict international law.

The international community considers all settlements built in the West Bank and east Jerusalem to be illegal because they are built on territory Israel occupied during the 1967 Six Day War.

The Israeli left has long argued that the creation of a Palestinian state is vital if Israel is to retain both its Jewish and democratic nature.