AFP - A Palestinian minister on Tuesday warned thousands of Palestinians to stop working in Israeli settlements or face stiff fines and jail time.

"We call on all Palestinians in the settlements to stop working," economy minister Hasan Abu Libdeh said at a news conference in Ramallah.

"The Palestinian Authority will enforce the law against Palestinians who work in the settlements at the end of this year," he added.

Under a law approved last month, any Palestinian found working in a Jewish settlement faces a fine of about 14,000 dollars or five years behind bars, Abu Libdeh said.

An estimated 25,000 Palestinians currently work in settlements, he said.

The new law also makes it illegal to trade in goods from settlements, with offenders also facing heavy punishment.

Palestinian officials have staged a major campaign to eliminate such goods, with confiscated produce from settlements torched in public.

Palestinians view the more than 120 settlements, populated by nearly a half million Israelis and scattered across the West Bank and annexed east Jerusalem, as a major obstacle to the establishment of their future state.