JERUSALEM — Israel’s prime minister rejected international criticism of West Bank settlement construction on Friday, equating it to “ethnic cleansing” of Jews and insisting the settlements are not an obstacle to peace, in a video that drew a rare rebuke from the United States.

Israel has been widely criticized, including by its close ally the U.S., for building settlements in territories captured in the 1967 Mideast war, land the Palestinians want as part of their future state.

Benjamin Netanyahu said in a video posted online that he has “always been perplexed” by claims that Israeli settlement building is “an obstacle to peace.”

He pointed to Israel’s Arab minority, which enjoys citizenship and voting rights but often faces discrimination in housing and employment.

“No one would seriously claim that the nearly 2 million Arabs living inside Israel, that they’re an obstacle to peace,” Netanyahu said. “Yet the Palestinian leadership actually demands a Palestinian state with one precondition: No Jews. There’s a phrase for that: It’s called ethnic cleansing.”

“It’s even more outrageous that the world doesn’t find this outrageous,” he added. “Since when is bigotry a foundation for peace?”

U.S. State Department spokeswoman Elizabeth Trudeau told reporters in Washington the administration is “engaging in direct conversations with the Israeli government” about the video.

“We obviously strongly disagree with the characterization that those who oppose settlement activity or view it as an obstacle to peace are somehow calling for ethnic cleansing of Jews from the West Bank. We believe that using that type of terminology is inappropriate and unhelpful,” Trudeau said.

She said Israel expansion of settlements raises “real questions about Israel’s long-term intentions in the West Bank.”

Ahmed Majdalani, an adviser to Palestinian President Mahmoud Abbas, dismissed Netanyahu’s remarks as “lies.”

“These are silly claims,” he said. “It’s Netanyahu who conducts ethnic cleansing every day in Jerusalem and the Palestinian territories by announcing (new) settlement units… The settlements are an ongoing war.”

Israel captured the West Bank and east Jerusalem, home to holy sites sacred to Jews, Muslims and Christians, in the 1967 war. The Palestinians want the territory for their future state, along with the Gaza Strip and east Jerusalem as their capital.

Israel says Jews have been living in those areas for centuries, and that their presence does not undermine prospects for peace. It also blames failed peace efforts on Arab denials of Jews’ historical connections to the land.

Israel annexed east Jerusalem — a move that is not recognized internationally — and maintains a nearly 50-year military occupation of the West Bank. The West Bank is not sovereign Israeli territory and its Palestinian inhabitants, unlike Israeli Arabs, do not have Israeli citizenship.

Some 120 settlements have been built in the West Bank, now home to about 400,000 people. Some 200,000 Israeli Jews live in east Jerusalem, which Israel annexed and considers part of its “eternal, undivided” capital.

The Palestinians, along with most of the international community, view Israel’s settlements in the West Bank as illegal or illegitimate. They say the growing number of settlers makes it increasingly difficult to establish their own state in these territories.

The Palestinians have demanded a halt to settlement construction ahead of any new peace talks.

Russia and other countries have been trying to restart peace talks that collapsed over two years ago, in part because of the settlements issue.

“I think what makes peace impossible is intolerance of others. Societies that respect all people are the ones that pursue peace. Societies that demand ethnic cleansing don’t pursue peace. I envision a Middle East where young Arabs and young Jews learn together, work together, live together side by side in peace,” Netanyahu said in the video on Friday.

The Palestinians have long accused Israel of ethnic cleansing during the 1948 war, when hundreds of thousands of Arabs fled or were expelled in the fighting.

Later Friday, the Palestinian Health Ministry said Israeli troops killed a Palestinian teenager in clashes along the border with Gaza, territory ruled by the Islamic militant group Hamas. It said that after Muslim prayers a group of Palestinians went to the border and threw rocks at soldiers, who responded with live fire.

The military said it investigated the incident and determined that soldiers did not open fire. It says the troops used tear gas to disperse “rioters” who were trying to damage the security fence along the border.