The UN envoy on Middle East peace has warned that the developments over the past 11 days in and around the Al-Aqsa Mosque compound in East Jerusalem have demonstrated the grave risk that the Israeli-Palestinian conflict could become a religious one that could ultimately engulf the rest of the region.

While recognising that Israelis and Palestinians, fortunately, have not succumbed to the torrent of violent upheaval that has engulfed the region in recent years, Nickolay Mladenov, UN Special Coordinator for the Middle East Peace Process, told an open debate in the UN Security Council that for nearly a century, despite myriad peace efforts, one conflict has evaded solution.

His briefing to the 15-nation Council highlighted the latest clashes and rising tensions over the past two weeks in the Old City in Jerusalem. Violence has resulted in deaths on both sides.

These developments demonstrated the grave risk of turning the Israeli-Palestinian conflict into a religious one and dragging both sides into the vortex of violence with the rest of the region, Mladenov said, stressing the need for all parties to show restraint and promptly end this crisis.

Noting that the final status issue concerning Jerusalem needs to be negotiated and decided by the two sides, he urged Israel to fulfil the responsibility to uphold its obligations under international human rights law and humanitarian law. He also urged Palestinian leaders to avoid provocative statements that further aggravate an already tense environment.

The latest incidents have taken place against a backdrop of other developments, the envoy stressed.

Throughout the month, Israel continued to advance its plans to construct settlements in East Jerusalem. I must once again emphasise that settlement activity in occupied territory is illegal under international law and undermines the chances for the establishment of a viable, contiguous, sovereign Palestinian state as part of a two-state solution, he warned.

On a positive note, it was pointed out that an interim power purchasing agreement between the two sides was signed on 10 July, which set the stage to negotiate a more comprehensive power purchasing agreement towards Palestinian energy independence. In addition, an agreement was reached to increase water supply for Palestinians in the West Bank and the Gaza Strip.

Turning to the situation in Gaza, he reiterated that the political standoff between two Palestinian factions Fatah and Hamas has taken the two million people living in the tiny enclave hostage.

Since violently seizing control of Gaza, Hamas has tightened its grip on power and suppressed dissent, he explained.

The punishing measures taken against Hamas, including electricity cuts, have worsened the humanitarian situation in Gaza. Whatever the political differences between the Palestinian factions, it is not the people of Gaza who should pay the price, Mladenov underscored, calling on Palestinian leaders to address the destructive consequences of the split.

Finally, he said recent events are a reminder of how easy it could be to reach a dangerous escalation, and he, expressed hope that Israel's agreement with Jordan and positive engagement with religious authorities would result in actions that would circumvent violence in the future.

We must not lose focus on the need to restore a political perspective, on the need to bring Palestinians and Israelis back into an environment that is conducive to negotiations on a final status arrangement and avoids turning the national Israeli-Palestinian conflict into a religious one, he emphasised.