The Palestine Liberation Organization's Central Council on Wednesday night decided to suspend security coordination with Israel, according to the official Palestinian news agency Wafa.
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The move comes a day after three suspected terrorists were killed by Israeli forces in the city of Nablus in northern Judea and Samaria. A fourth suspect is still on the loose.
The four gunmen were accused of perpetrating several shooting attacks in the West Bank against Israeli soldiers and civilians in recent weeks.
The Palestinian Central Council in a statement at the conclusion of a three-day conference also said that it was suspending recognition of Israel until a Palestinian state is recognized within the 1967 borders with east Jerusalem as its capital and settlement activity is stopped.
The Central Council also rejected "economic peace and the 'conflict reduction and trust' projects that Israel offers as an alternative to a just peace based on [the establishment of a Palestinian state]."
The body passed a similar resolution four years ago that went unimplemented.
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The PLO's executive committee, chaired by Palestinian Authority President Mahmoud Abbas, must still approve the resolutions for them to be enacted.
The executive committee is the highest-level Palestinian political body.
i24NEWS contributed to this report.