Ramallah (Palestinian Territories) (AFP) - The Palestinian Liberation Organisation called Saturday for a comprehensive strategy against Islamic extremism while addressing the conflict with Israel, alluding to controversial remarks by US Secretary of State John Kerry.

The top US diplomat, after his return from a Middle East trip, infuriated Israeli ministers Thursday when he said the unresolved conflict was fuelling recruitment for the Islamic State group.

"There wasn't a leader I met... who didn't raise with me spontaneously the need to try to get peace between Israel and the Palestinians, because it was a cause of recruitment and of street anger and agitation," he said.

Reacting to that, PLO secretary general Yasser Abed Rabbo told AFP that "linking the fight against terrorism and the end of the Israeli occupation is a strategic position that we support."

The PLO is "ready to work hard with the American administration and all regional leaders to develop mechanisms to implement different levels of the strategic direction announced by Kerry," he said, without elaborating.

Israeli Economy Minister Naftali Bennett said that "even when a British Muslim beheads a British Christian there will always be someone who blames the Jews."

State Department spokeswoman Marie Harf insisted that Kerry "did not make any linkage between Israel and the growth of ISIL (an alternative acronym for the Islamic State group), period."

"If we could achieve peace between the Israelis and Palestinians, that would create a more stable region writ large," she said Friday.

For his part, Abed Rabbo said "those who criticise Kerry want the terrorism of the Islamic State organisation to continue to use it as an excuse to obstruct a political solution and end to the occupation."

"We hope that these balanced American statements will reflect on the Palestinian resolution in the (UN) Security Council that will be proposed in the coming days" to call for the end of Israel's occupation.