Sweden said Monday it will not open an embassy in Ramallah even though it has officially recognized the state of Palestine, the first major EU nation to do so.

"Nobody has opened an embassy in Ramallah, and we think that this can be managed by the consulate in Jerusalem, which is a satisfactory solution for us," Foreign Minister Margot Wallstroem told public radio.

U.S. Secretary of State John Kerry said Thursday that steps were agreed at talks in Amman to lower tensions between the Israelis and Palestinians.

After talks with Israeli Prime Minister Benjamin Netanyahu and Jordan's King Abdullah II, Kerry said "firm commitments" had been made to maintain the status quo at holy sites in Israeli-annexed east Jerusalem.

Israel approved new settler homes in east Jerusalem on Wednesday despite mounting unrest, as U.S. Secretary of State John Kerry was set for talks with the Palestinian leader on easing tensions.

The new settlement construction was announced just hours after suspected Jewish extremists torched a West Bank mosque, in another development likely to inflame tempers in an already heated atmosphere.

Palestinian President Mahmoud Abbas on Tuesday accused the Islamist movement Hamas of trying "to destroy" efforts to broker national unity through a series of bomb blasts in Gaza last week.

Hamas quickly hit back, describing the allegations as "lies".

After days of clashes, the smell of teargas hangs heavy in the air in Kufr Kana, a hilltop Arab town simmering with resentment after Israeli police killed one of its own.

Although residents of this biblical town in Galilee are trying to resume some semblance of normal life, there is still a great deal of anger over Saturday's shooting of 22-year-old Kheir Hamdan during an apparently routine arrest.

Two Gaza fishermen were wounded and four missing Monday after the Israeli navy fired on two boats off the coast, officials from the Hamas-run security services said. 

It was not immediately clear whether the four had been arrested, the officials added.

Clashes and demonstrations took place across Israel Sunday as police raised alert levels nationwide amid a wave of anger over the deadly shooting of a young Arab-Israeli.

With shops, schools and business shuttered as Arab towns and villages observed a general strike, police raised the alert to one below the highest level and deployed in areas of friction, spokeswoman Luba Samri said.

French Socialist lawmakers are preparing to submit a motion to parliament asking the government to recognize Palestine as a state, sources said Tuesday, weeks after British MPs passed a similar vote.

The planned move follows the collapse of peace talks between Israel and Palestinian territories and this year's conflict in Gaza in which more than 2,000 Palestinians and dozens of Israelis were killed.

Jewish extremist groups planned to march through Jerusalem Thursday in a move expected to stoke tensions following a deadly Palestinian car attack and clashes at the flashpoint Al-Aqsa mosque compound.

Israeli police set up concrete barriers and roadblocks in annexed Arab east Jerusalem, a day after a Palestinian deliberately ran over two groups of pedestrians, killing a policeman, in the second such attack in a fortnight.

U.S. Secretary of State John Kerry on Wednesday condemned a deadly car attack in Jerusalem saying it was a "terrorist act" that "only raises tensions" in the tinderbox region.

Speaking ahead of a meeting with Jordan's foreign minister in Paris, Kerry told reporters: "That is not just a terrorist act and an ... atrocity, but it only makes matters worse. It only raises tensions."