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The US is urging its allies to reject a new UN resolution calling on Israel to withdraw from the occupied West Bank and Gaza.

The draft resolution, set to be put forward by the State of Palestine, calls for Israel to unconditionally withdraw from the occupied territories, including Israeli settlers, and pay reparations to Palestinians.

According to Sky News Australia, the US has condemned the draft resolution and is calling on Australia and other Western allies to either reject or abstain from the vote.

Australia's shadow foreign minister also urged the government to reject the motion, saying it would be counterproductive to peace between Israel and Palestine.

In comments made to Sky News Australia, Simon Birmingham said "with such a counterproductive and one-sided motion, the decision for the Albanese government should be clear cut".

According to Ibtisam Azem, the UN correspondent for °®Âþµº's sister publication Al-Araby Al-Jadeed, Palestinian Ambassador to the UN Riyad Mansour said the draft was done in consultation with other countries.

Mansour added that the resolution was part of taking steps to end the occupation of the Palestinian Territories, as well as stopping international support for Israel, such as through arms deals.

Last week, the State of Palestine took its seat at the UN General Assembly as a permanent observer member state, giving its representatives new rights in the UN.

The draft resolution, which is eight pages long, is set to be debated on Thursday and includes several items.

Included is the demand for the withdrawal of Israeli forces in the occupied Palestinian Territories, including East Jerusalem within 12 months of the passing of the resolution.

It also calls for the evacuation of all Israeli settlers and the dismantling of part of the wall surrounding the occupied West Bank.

Likewise, all properties, lands and assets seized by Israel since 1967 should be returned, as well as displaced Palestinians.

Additionally, the resolution calls for the imposition of sanctions on Israel and on individuals involved in maintaining the occupation on the Palestinian territories.

In June, the International Court of Justice ruled that Israel's occupation of the West Bank is illegal and amounts to apartheid.