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Israel's parliament on Monday advanced a bill to revoke the citizenship or permanent residency of Palestinians accused of "terror acts" and receiving money from the Palestinian Authority (PA), with rights groups calling the proposed law another act of "ethnic cleansing".

The bill passed its first reading with 86 of 120 votes in favour, from both the far-right government and the opposition. It will need to pass three readings to become law.

Israeli lawmakers say that it targets those who are "disloyal" to the country and have allegedly taken payments in exchange for carrying out attacks.

Activists have slammed the bill saying the law would only ever apply to Palestinian citizens of Israel, and an attempt to "ethnically cleanse" this population from Israel.

"The law in its preliminary form constitutes an attempt to circumvent international law - and even Israeli law - which does not allow the expulsion of a citizen without the presence of another country that grants them citizenship or residency," writer and freed prisoner Ameer Makhoul told °®Âþµº's Arabic-language sister site, Alaraby Aljadeed.

"The law means gradual ethnic cleansing, starting with individuals and then expanding in scope."

The bill follows up on an agreement made between Prime Minister Benjamin Netanyahu and his far-right coalition partners to put forward legislation to expel "terrorists".

It goes further than existing legislation by stating that individuals will be expelled to the Palestinian Authority territories after their sentences are served.

“Revocation of citizenship and permanent residency violates the most fundamental rights under international law," Adalah, the Legal Center for Arab Minority Rights in Israel, said in a statement earlier this month.

"This bill seeks to further expand Israel’s longstanding policy of creating two separate legal tracks based on racial identity, as the state designed this measure to be used exclusively against Palestinians."

Israel deported Palestinian human rights defender Salah Hammouri to France in December having already revoked his residency permit, an act described as a "war crime" by Amnesty International.

More than 700,000 Palestinians were expelled from their homes during the 1948 creation of Israel, many to Gaza, the West Bank and Arab countries.

Israel's invasion of the West Bank in 1967 led to another wave of refugees to neighbouring states.