Israeli prosecutors have charged two Jewish youths with vandalising Palestinian cars and incitement to racism, a police statement said on Monday.

It said that they were arrested on October 21 and last week charged with puncturing the tires of Palestinian-owned vehicles in the West Bank and east Jerusalem.

Israel was on Sunday split over the weight of remarks by Palestinian leader Mahmoud Abbas in which he appeared to give up on the right of refugees to return to homes they lost or fled from in the 1948 war.

His remarks were immediately welcomed as "courageous" by Israeli President Shimon Peres, but sparked a backlash of protest in the Hamas-ruled Gaza Strip where thousands burned pictures of the Palestinian leader.

Palestinian cars were vandalized overnight in the Shuafat neighborhood of Israeli-annexed east Jerusalem, in an attack that bore the hallmarks of a hate crime by Israeli rightwing extremists, Agence France Presse reported.

Six vehicles had their tires slashed and were daubed with slogans in Hebrew reading "Price tag," "Death to the enemy" and "Kippa Sruga" the name of a wildcat settlement outpost in the northern West Bank razed by Israeli security forces on Thursday.

Palestinian leader Mahmoud Abbas has denied giving up on the refugees' right of return, saying remarks about not returning to his home town, which is now in Israel, was a "personal position."

"I have never and will never give up the right of return," he told Egypt's al-Hayatt Egyptian satellite channel late on Saturday, according to a transcript released on Sunday.

A Palestinian was seriously wounded by cross-border fire from an Israeli tank in the central Gaza Strip on Friday, a spokesman for the Hamas-run health ministry said.

He did not give the man's name or the exact circumstances but said he was 22 years old and close to the border fence with Israel, east of Bureij refugee camp, when he was hit.

French President Francois Hollande on Wednesday urged Israel and the Palestinians to resume peace talks without any conditions, while criticizing continued Israeli occupation.

"Only negotiations can lead to a definitive solution," he said after his first direct meeting with Israeli Prime Minister Benjamin Netanyahu in Paris.

A militant died on Thursday of wounds sustained in an Israeli raid a day earlier as calm returned to the skies over Gaza after a truce took hold, ending 72 hours of bloodshed.

As Gaza began preparing for Eid al-Adha, which starts Friday, medical sources said 24-year-old Ahmed Hrzalla, a militant with the Popular Resistance Committees (PRC) who was severely wounded in an air strike in Rafah, died of his injuries.

French Prime Minister Jean-Marc Ayrault has broken with diplomatic protocol by openly expressing his hope that Barack Obama wins the upcoming U.S. presidential election.

"If I was an American citizen I wouldn't hesitate to vote for Obama," he told a radio interviewer on Wednesday.

Israeli air strikes killed two Gaza fighters on Monday as they clashed with troops who crossed the border on the eve of a landmark visit by the Qatari emir, medical sources said.

The flareup provoked threats of revenge from the Ezzedine al-Qassam Brigades, the armed wing of the ruling Hamas movement, and a pledge from Israeli Prime Minister Benjamin Netanyahu that there would be no immunity for those firing on the Jewish state.

Polling stations were poised to closed in the West Bank on Saturday after 12 hours of voting in the first Palestinian election since 2006, with voters casting their ballots in a municipal poll that was boycotted by Hamas.

After nine hours of voting, the Central Elections Commission (CEC) said the turnout was 35 percent in all areas except for the southern Hebron district where more than 40 percent of registered voters had shown up by the late morning.