A new law to execute “terrorists” in Israel will effectively apply only to non-Jews, according to a source in the Likud party.

Incoming Defence Minister Avigdor Lieberman has made the restoration of the death penalty for terror attacks a sticking point for his far-right Yisrael Beiteinu party to join the government.

However, according to a Likud source quoted by Haaretz, the new law would apply only to people tried in military courts.

As Palestinians are prosecuted in military courts while Jews accused of similar crimes are prosecuted in civil courts, the death penalty would in practice apply only to Palestinians.

The move to restore the death penalty, which has never been officially abolished but has not been used since 1962, has proved highly controversial in Israel.

Former attorney general Yehuda Weinstein on Thursday called on his successor, Avichai Mendelblit, to oppose the proposals.

"There's nothing like it in the world,” he told Haaretz. “There are no countries that added the death penalty to the book of law, only ones that took it off.

“It's not practical in terms of deterrence, since these are criminals who anyhow act out of an ideological motive and aren’t afraid of death. It's also not moral.”

However, other right-wing politicians in Israel have backed calls for the death penalty to be used again.

Ayelet Shaked, Israeli justice minister and member of the far-right Jewish Home party, said last July that she "found out that there's a death penalty for terrorists and that it was last handed out in 1994. Since then the military prosecution has not requested a death penalty, but it can be requested, and the military court can give it according to the law.

"Unfortunately, the sentence of the terrorist prosecuted in 1994 was commuted to a life sentence, and he was released in the Shalit deal, but the penalty exists and can be carried out," she added, according to Haaretz. Israeli soldier Gilad Shalit was part of a prisoner-exchange deal In 2011 after being held captive by Hamas for five years.