Israel's parliament has passed a law which aims at limiting the release of Palestinian prisoners who have been convicted of killing of Israelis as a concession in peace processes.

The Israeli parliament voted 35-15 on Monday to approve the legislation, which will not include current prisoners and will contain a loophole which will allow future Israeli presidents to pardon any future inmates at their choosing.

After the vote, which was proposed by the right-wing Jewish Home party, its leader and Israeli Economy Minister Naftali Bennett said: "Terrorists should die in jail."

Qadoura Fares, head of the Palestinian Prisoners' club, which represents Palestinian citizens in Israeli imprisonment, said that the new legislation is "racist" and that Israel would eventually be forced to free prisoners as part of any future peace talks.

"Israel will find themselves one day compelled to change the law if it is important for political reasons," he said.

The leader of the left-wing opposition Meretz party Zehava Galon accused Bennett's party of attempting to thwart any opportunity of a peace deal with the Palestinian people.

"You are not allowing the government any political leeway," she said.

The law will allow Israeli judges to rule that any alleged murder by a Palestinian defendant was committed "under severe circumstances", which will prevent the government from releasing them in peace negotiations or a prisoner exchange.