LONDON/JERUSALEM (Reuters) - In a 67-word statement composed 100 years ago, Britain endorsed the establishment of a Jewish homeland in the Middle East, triggering a process that would culminate in the creation of Israel - and with it one of the world’s most intractable conflicts.

Palestinians take part in a protest against Balfour Declaration, in Gaza City November 2, 2017. REUTERS/Mohammed Salem

On Thursday, British and Israeli leaders commemorated the centenary of that statement, known as the Balfour Declaration after the foreign minister who penned it, with a banquet in the gilded halls of London’s Lancaster House mansion.

But as Prime Minister Theresa May and Israel’s Benjamin Netanyahu dine, protesters gathered to demand that Britain acknowledge the suffering they say the declaration has caused to Palestinian people, and recognize their claim to statehood.

“The reason it is getting so much attention is because the conflict which it launched ... is still very much in existence and there is a sense, particularly on the Palestinian side, of continuing injustice,” said Ian Black, an academic at the London School of Economics.

“It really is an issue which is alive and toxic and bitterly divisive.”

While Israel reveres Arthur Balfour, naming streets and a Tel Aviv school after him, Palestinians decry his declaration as a promise by Britain to hand over land it did not own.

The contested declaration is at the root of the Israeli-Palestinian territorial conflict which, after several wars and decades of international diplomacy, remains unsettled.

Marches, each drawing about 1,000 demonstrators, were held in the West Bank cities of Ramallah and Nablus and in Gaza, a modest turnout for political protests in those areas. Protesters waved Palestinian flags and held banners demanding Britain rectify its “historical sin”.

In Gaza, Ahmed Helles, a senior official from President Mahmoud Abbas’s Fatah movement, said: “Britain should feel ashamed and stigmatized because of this promise and not hold celebrations.”

Netanyahu met May and foreign minister Boris Johnson separately before the dinner, which was also attended by U.S. Secretary of Commerce Wilbur Ross and other high profile guests.

“Sadly, Balfour remains unfinished business – as his fundamental vision of peaceful co-existence has not yet been fulfilled,” May said at the dinner according to a copy of her speech distributed by her office.

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“I believe it demands of us today a renewed resolve to support a lasting peace that is in the interests of both Israelis and Palestinians – and in the interests of us all.”

Britain held Palestine, which had been under Ottoman Turkish rule, from 1922 until after the end of World War Two.

Israel declared independence in 1948, at the end of British Mandatory rule and after the U.N. General Assembly voted in 1947 in favor of a plan, rejected by Palestinian representatives, to partition Palestine into an Arab state and a Jewish state.

The ensuing regional conflict, played out over a series of wars fought along Arab-Israeli lines, has left the Palestinians seeking to establish an independent state in territories captured by Israel in the 1967 Middle East war.

DELICATE COMMEMORATION

Thursday’s commemoration, culminating in the dinner hosted by descendants of Balfour and of the recipient of his declaration, Jewish community leader Walter Rothschild, required Britain to strike a delicate diplomatic balance.

Britain regards Israel as a close and important ally and supports international efforts to find a peaceful solution that results in separate Israeli and Palestinian states.

Attempting to strike the right balance, Johnson on Monday praised the declaration for helping to create a “great nation”, but he also said the spirit of the declaration had not been fully realized.

He was referring to a clause in the document which said nothing should prejudice the civil and religious rights of existing non-Jewish communities.

Israel has traditionally focused less on that clause and more on the declaration’s landmark endorsement of a Jewish homeland, and plans to celebrate the anniversary. The Israeli parliament will hold a special commemorative session next week.

“While the state would not have arisen without settlement, sacrifice and a willingness to fight for it, the international impetus was undoubtedly the Balfour Declaration,” Netanyahu told a meeting of his cabinet ahead of his visit to London.

Israel does not oppose international efforts to make peace, but says - as do international sponsors - that a solution cannot be imposed and should stem from talks between the two parties.

Some Arab lawmakers in the Israeli parliament said they would boycott the celebrations, and protests were planned across several days in London by organizations pledging solidarity with the Palestinians.

Earlier this week Abbas used an article in Britain’s Guardian newspaper to reiterate calls for the British government to acknowledge the declaration as a mistake.

“The creation of a homeland for one people resulted in the dispossession and continuing persecution of another – now a deep imbalance between occupier and occupied,” he wrote.

“The balance must be redressed, and Britain bears a great deal of responsibility in leading the way.”

Britain has refused Palestinian demands for an apology and does not recognize Palestine as a state. Johnson said on Monday Britain would be willing to offer recognition, but wanted to time it to give maximum impetus to peace efforts.