The two leaders of Palestine's negotiating team, Dr Saeb Erekat and Dr Mohammad Shtayyeh, have submitted their resignations to Palestinian Authority President Mahmoud Abbas, according to Ma'an news agency.
The resignations follow Israel's announcement that it plans to demolish 20 Palestinian buildings in occupied Jerusalem, leaving 16,000 Palestinians homeless.
Informed Palestinian sources explained that "the resignations will be at the disposal of the president to accept, reject or postpone in accordance with the public interest of the Palestinian people."
According to the sources, the negotiating team resigned in protest of Israeli attempts to abandon its obligations towards the peace process, instead focusing on the continuation of settlement construction and the Judaisation of Jerusalem."
The sources said that President Abbas has called for an urgent meeting with the Executive Committee of the Palestine Liberation Organization (PLO) to discuss the resignations and to take an appropriate decision.
However according Israel's Yedioth Ahronoth newspaper, Erekat has since refuted the reports of his resignation and PLO Executive Committee member Wasel Abu Yusef also "denied that Erekat and his team had resigned. He said the issue had not even come up during the committee's meeting in Ramallah on Thursday."
US Secretary of State John Kerry is expected to arrive in the region next week to meet with Israel's Prime Minister Benjamin Netanyahu and President Abbas to discuss the outcomes of their bilateral negotiations.