The Abbott government has ruled out using the term "occupied" when describing Israeli settlements in East Jerusalem, prompting suggestions about a shift in Australia's foreign policy.
The government on Thursday delivered a statement to clarify its stance on the controversial question of the legality of settlements after the issued flared up at a Senate hearing the night before.
Attorney-General George Brandis, on behalf of Foreign Minister Julie Bishop, said it was "unhelpful" to refer to historic events when describing these areas, given the ongoing Middle East peace process.
"The description of East Jerusalem as 'occupied' East Jerusalem is a term freighted with pejorative implications which is neither appropriate nor useful," Senator Brandis told a Senate estimates hearing.
"It should not and will not be the practice of the Australian government to describe areas of negotiation in such judgmental language."
Senator Brandis sparked a heated debate the previous evening when he stated that no Australian government of either political persuasion "acknowledges or accepts" the use of the word occupied.
A number of senators disagreed, pointing out that Australia had voted in support of UN resolutions in 2011 and 2012 where such language was used to describe the East Jerusalem settlements.
Independent senator Nick Xenophon, among other senators, suggested that dropping the term occupied in relation to the settlements would represent a "massive shift" in Australia's foreign policy.
Senator Xenophon tried unsuccessfully to determine whether the Department of Foreign Affairs and Trade had changed its legal advice to the government on settlements.
In line with protocol, DFAT secretary Peter Varghese did not discuss the department's legal advice before the Senate committee, but did concede the word "occupied" had been used by the government in the past.
Ms Bishop raised eyebrows in January when she questioned which international law had declared Israeli settlements illegal.
Former foreign minister Bob Carr was a vocal critic of settlements, which opponents site as a key obstacle to a future Palestinian state and lasting peace agreement with Israel.
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