Israeli Prime Minister Benjamin Netanyahu said Thursday he would seek a new law declaring Israel a Jewish state, a move rejected by Palestinian leaders in the peace talks that collapsed last Tuesday and opposed by his own justice minister, Tzipi Livni.

Netanyahu reportedly said such a law would "legally anchor" Israel as "the nation-state of the Jewish people," but Haaretz reports that Livni — also Israel's chief negotiator with the Palestine Liberation Organization — vowed to resist what she said was "the damaging, weakening or subjugating of [Israel's] democratic values to its Jewish values."

Palestinians fear that defining Israel as a Jewish state would codify second-class status to the 1 in 5 Israeli citizens who are Palestinian by ethnicity, and also negate any right of return of Palestinian refugees from wars since 1948 to what is now Israel — a right established in United Nations General Assembly Resolution 194.

"I will promote a Basic Law that will define Israel as the nation-state of the Jewish people," Netanyahu said in Tel Aviv, in a speech that alluded to Palestinian rejection of his demand to recognize Israel as such in the U.S.-backed negotiations.

Israeli enshrinement in law of the concept of Israel as a Jewish state — a definition that was included in its 1948 Declaration of Independence — could complicate any efforts to restart negotiations that stumbled over that issue and others.

Netanyahu said Thursday that those seeking the creation of a Palestinian state, while refusing to recognize Israel as a Jewish state, were challenging its right to exist. He was speaking in the hall where the Declaration of Independence was signed.

Mohammad Barakeh, an Arab lawmaker from the left-wing Hadash party, said legislation declaring a Jewish state would be racist in nature. "The truth is, I was surprised by his intention to bring this as a Basic Law," Barakeh told Reuters by telephone.

"I have been following Netanyahu's actions in the peace talks,” he said. “I know he doesn't want peace and wants to put a spanner in the works. But he's gone too far with this."

In lieu of a formal constitution, a series of Basic Laws adopted by parliament since Israel's founding define governmental, legislative and judicial powers, protect civil rights and declare Jerusalem as Israel's capital — although the latter claim is not recognized by the international community.

A new Basic Law declaring Israel a Jewish state would be largely symbolic, an Israeli official said, adding: "It is a declaration to show that this is part of our national ethos."

Netanyahu, in his address, pledged that Israel will always "ensure full equality in the personal and social rights of all its citizens — Jews and non-Jews alike — in a Jewish and democratic state."

The response of his justice minister and of lawmakers representing Israel's Arab minority suggests that many Israelis disagree, setting the stage for an intense internal debate in the weeks and months ahead over Israel's identity.

Al Jazeera and Reuters