AFP - Israel last year stripped a record number of Palestinians of their Jerusalem residency status, and the accompanying freedom of movement and insurance benefits, government figures revealed on Wednesday.

In 2008, a total of 4,577 Palestinians lost the so-called "blue ID," the Israeli identification card that entitles holders to national insurance and freedom of movement throughout the country, according to the interior ministry which issues the cards.

By comparison, 8,558 Jerusalem Palestinians lost their residency status between 1967, when Israel captured the Arab eastern part of the city, and the end of 2007, the figures showed.

Palestinians living in east Jerusalem, which Israel later annexed in a move not recognised by the international community, hold Israeli IDs but not passports.

They are entitled to all the insurance benefits of Israeli citizens and can vote in municipal -- but not national -- elections.

They also enjoy complete freedom of movement within the country, unlike their compatriots in the occupied West Bank and the Gaza Strip, who cannot enter the Jewish state without special permits that are hard to obtain.

According to the liberal Haaretz daily, which first reported on the story, the dramatic increase in the number of confiscated IDs came after the previous interior minister, Meir Sheetrit of centrist Kadima party, decided to update the residency lists of east Jerusalem Palestinians.

Those who could not prove that they still lived in east Jerusalem were stripped of their IDs.

"In the beginning of 2008, it was decided to conduct a census of those who do not live in Israel but are still registered as residents, so that the population register could be corrected," interior ministry spokeswoman Sabine Haddad told AFP.

"To be a resident of Jerusalem, a person must prove that Israel is their main place of residence. Otherwise the population register must be altered," she said.

Some 180,000 Israeli settlers currently live alongside nearly 270,000 Palestinians in east Jerusalem.

Israel considers Jerusalem to be its "eternal, indivisible" capital, while the Palestinians claim the eastern and mostly Arab part as the capital of their promised state.

Israeli law stipulates that permanent residence status can be revoked if an individual has lived at least seven consecutive years abroad or has received foreign residency or citizenship, according to the Israeli HaMoked rights group, which slammed the move.

"Revocation of residence has reached frightening proportions," it said in a statement.

"The interior ministry campaign in 2008 is only part of a general policy whose aim is to limit the Palestinian population and preserve a Jewish majority in Jerusalem, whose future is supposed to be determined in negotiations.

"The Palestinians are natives of this city, not residents who have recently arrived."