JERUSALEM — Presumptive Republican nominee Mitt Romney weighed in on the economic disparity between Israel and the Palestinian territories, saying that the "power of culture" is responsible for Israel's success.

"And as you come here and you see the GDP per capita for instance in Israel which is about $21,000 and you compare that with the GDP per capita just across the areas managed by the Palestinian Authority which is more like $10,000 per capita you notice a dramatic, stark difference in economic vitality," he said.

"And that is also between other countries that are near or next to each other. Chile and Ecuador, Mexico and the United States. I noted that part of my interest when I used to be in the world of business is I would travel to different countries was to understand why there were such enormous disparities in the economic success of various countries."

Romney told donors at a $1 million fundraiser as he visited Jerusalem that having seen the accomplishments of the Jewish people, “I recognize power of culture."

"And you look at Israel and you say you have a hard time suggesting that all of the natural resources on the land could account for all the accomplishment of the people here," he added. "Culture makes all the difference. And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things. One, I recognize the hand of providence in selecting this place,"

Romney's remark is drawing outrage of Palestinian leaders, with Saeb Erekat, a senior aide to Palestinian President Mahmoud Abbas, telling the Associated Press that it was racist.

"It is a racist statement and this man doesn't realize that the Palestinian economy cannot reach its potential because there is an Israeli occupation," he said.

Romney met with Palestinian Prime Minister Salam Fayyad on Sunday afternoon, and only exchanged small talk about the Olympics while reporters were in the room.