An Israeli and a group of Palestinians last week set aside their differences in order to carry out an armed bank robbery, Palestinian police said.

The heist at a bank in the West Bank town of Ramallah on Tuesday (local time) was carried out by six armed gunmen who made off with some $US30,000 ($43,000) according to security officials.

Palestinian police Colonel Adnan al-Damiri says police arrested two Palestinians who confessed they carried out the robbery with three Palestinians living in Israel and an Israeli Jew.

The Israeli "was the mastermind of the operation and he also took part in it," before fleeing back to Israel, Mr Damiri said.

He says such coordination between Arabs and Jews could signal a "dangerous" new trend of organised crime in the Palestinian territory.

Palestinian police have passed the results of the investigation on to Israeli security forces and requested they try to hunt down the remaining suspects.

Palestinian police are allowed to patrol limited areas of the West Bank, which Israel occupied in the 1967 Six Day war, but the Israeli military continues to operate freely in all parts of the territory.

Israel and the Palestinians formally relaunched US-backed peace talks in November 2007, but have since made little visible progress.

-AFP