Israeli Prime Minister Benjamin Netanyahu has ordered the suspension of a controversial measure banning Palestinians from riding the same buses as Jewish settlers when returning from Israel to the West Bank.

"The proposal is unacceptable to the prime minister. He spoke with the defence minister this morning and it was decided that the proposal will be frozen," an official in Netanyahu's office told AFP news agency.

A three-month pilot project launched by Israeli Defence Minister Moshe Ya'alon had proposed West Bank bus segregation.

"Under a three-month pilot project, Palestinians who work in Israel will, starting Wednesday, need to return home by the same crossing without taking buses used by (Israeli) residents" of the occupied West Bank, a defence ministry official told AFP.

Israel's Haaretz newspaper also reported about the programme that was expected to be implemented by the Civil Administration.

Hundreds of Palestinians travel each day to work in Israel from the occupied West Bank, mainly in the construction business, using travel permits each time they cross.

Form of Apartheid

Israeli public radio said Defence Minister Yaalon had agreed to the ban, adding that it would allow "better control of the Palestinians and those leaving Israel and reduce security risks".

Israeli settlers in the West Bank have called for years for Palestinians to be banned from public transport there, arguing their presence poses a security risk.

The move was criticised by some Israeli opposition leaders.

"The separation between Palestinians and Jews on public transportation is an unnecessary humiliation and a stain on the face of the country and its citizens," opposition leader Isaac Herzog wrote on his Facebook page.

Zehava Galon, leader of the dovish Meretz party, went further, saying "this is how Apartheid looks".