Palestinian Foreign Minister, Riad al Maliki asked the International Criminal Court on Tuesday to open an "immediate investigation" into Israeli "crimes" committed against the Palestinian people.
Under the court's rules, any member can request an investigation.
"This referral is Palestine's test to the global mechanism of accountability and respect for worldwide law", he added.
The ICC launched a preliminary probe in 2015 into allegations of war crimes and crimes against humanity in Israel and the Palestinian territories, in the wake of the Gaza war.More news: Markets rise as Beijing and Washington avert trade war
"T$3 he ICC lacks jurisdiction over the Israeli-Palestinian issue, since Israel is not a member of the court and because the Palestinian Authority is not a state", it said in a statement.
The Palestinians seek all three areas, captured by Israel in 1967, for a future independent state.
While the PA and Palestinian NGOs have submitted documents as proof of Israeli government crimes, and requests to open a formal investigation, Palestine has never formally referred a case.
Mr Al Maliki said he had filed for an investigation into Israeli settlements in the West Bank and East Jerusalem and included the recent bloodshed in Gaza, where Israeli forces shot dead more than 100 protesters, including children, over several rounds of weekly protests.
Amid much controversy, the Palestinian Authority joined the ICC in January 2015 signing up to the Rome Statute, which underpins the world's only permanent war crimes court.More news: Tom Brady Hit NYC on Sunday with Wife, Kids ... Before Patriots OTAs
"The colonial regime practices forced displacement of Palestinian people and illegal transfer of Israeli citizens to a territory under occupation to perpetuate ir presence (.) What includes expansion of settlements and ir linked infrastructures, such as wall (barrier of separation), and blockade of Gaza Strip, "ensures a communiqué prior to denunciation of Palestinian Ministry of Foreign Affairs".
While the ICC can indict suspects, it has no police force and has to rely on cooperation from member states to enforce arrest warrants.
Jordan and Egypt ruled over those territories for 19 years without worldwide recognition, and then the area was taken away by Israel in June of 1967.
In response to the Israeli position, Hamas stressed that the occupation's rejection of an global commission of inquiry into the recent massacres is evidence of its involvement in a war crime. The Palestinians believe the step undercuts their own claims to east Jerusalem.
Worldwide law prohibits the transfer of civilian populations to occupied territories, and the global community overwhelmingly views the settlements as illegal. Thousands of soldiers are deployed to protect colonies that have water flows seven times higher than Palestinians and have at ir service main roads.More news: Samsung Galaxy J4 and Galaxy J6: new mid-range offering
It notes that in the case of Gaza, for instance, it uprooted all settlements there when it withdrew in 2005.