A United Nations bloc of developing countries has elected the observer state of Palestine as its next leader in a symbolic snub to the US and its ally Israel.

The Group of 77, which has grown to encompass 135 countries since its formation in 1964, was formed to promote its members’ collective economic interests and enhance their joint negotiating capacity. It now represents a total 80 per cent of the world’s population.

The choice of the Palestinians as the group’s chair for 2019 is a diplomatic win for Ramallah at the expense of Israel and Washington DC. Both have argued against strengthening the Palestinians’ international political clout until a peace settlement is reached in the intractable Arab-Israeli conflict which agrees on the formation of an independent Palestinian state.

Palestinian protesters remove barbed wire from fence at Gaza border

The permanent Palestinian observer to the UN, Riyad Mansour, confirmed news of the Group 77 decision in a phone interview on Tuesday with The New York Times.

The Palestinian mission to the UN was granted observer status in 2012, which made it eligible to join important bodies such as the International Criminal Court and Unesco.

The Palestinians have used their membership of both agencies to further their push for statehood as well as file complaints about alleged Israeli human rights abuses and settlement expansion in the West Bank.

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“[The US and Israel] are still denying we are a state,” Mr Mansour told The New York Times. “We walk like a state. We quack like a state. Therefore we are a state.”

The move to give the Palestinians the chair of such a large delegation comes at a time of heightened tensions between Israel and the Palestinians, sparked by the deteriorating humanitarian conditions in the Gaza Strip, and a new, significant stumbling block in the peace process in the form of US president Donald Trump's administration.

Mr Trump’s decision to fulfil an election campaign promise last December by recognising the contested city of Jerusalem as the capital of Israel sparked protests across the Muslim world.

It also led the Palestinian Authority leadership to sever diplomatic relations with the US, declaring the White House could no longer be an “honest broker” between the two parties.

The stalled negotiations do not sit well with Donald Trump, who has made Arab-Israeli peace – which he describes as “the ultimate deal” – a foreign policy priority.