While acknowledging Israel's "legitimate security concerns," the London-based human rights group said the Jewish state could not justify building its security barrier inside parts of the West Bank and condemned its settlement policies.

If Israel just wanted to keep out suicide bombers, Amnesty added, it would have only built the barrier along the Green Line that marked its boundary with the West Bank until Israeli forces invaded in the June 1967 war.

"Yet, the reality is that most of it is being built on Palestinian land," Amnesty's Middle East and North Africa Programme director Malcolm Smart said in a statement.

He said the Israeli barrier defies the International Court of Justice and separates Palestinian towns and villages in the West Bank.

His organisation said Palestinians are also restricted by more than 500 checkpoints and blockades as well as a network of roads reserved solely for settlers and linking settlements with Israel proper.

The policies are aimed at benefiting "continuously expanding but unlawful Israeli settlements" while causing the "virtual collapse of the Palestinian economy," the human rights group charged.

They are also "exacerbating the increasingly fragile conditions in which Palestinians live and work -- resulting in levels of despair, poverty and food insecurity never before seen in the" territories, he said.

"Most Palestinians are now relying on aid for subsistence, with families reducing the quality and quantity of the food they consume and selling assets essential for their livelihoods," he added.

Israeli actions, Amnesty said, have "resulted in widespread human rights abuses and have also failed to bring security to the Israeli and Palestinian civilian populations."