Israel may be forced to reverse a controversial policy of expelling Palestinians from the West Bank and Gaza after a vigorous protest from America.

The U-turn, which marks a rare official dressing-down for Israel from Washington, comes after Condoleezza Rice, the US secretary of state, raised objections to a policy that could have seen tens of thousands of Palestinian foreign passport holders driven from their homes in the Occupied Territories.

The territories are home to some 35,000 US citizens of Palestinian descent, many of whom returned during the mid-1990s after the more hopeful times of the Oslo peace accord, and have since married and started families.

They have, however, been unable to become permanent residents because Israel, which controls access to the territories, has refused to grant them residency.

While most have made do with tourist visas, Israel recently stopped issuing even these, forcing Palestinians with foreign passports to leave immediately or stay illegally and face forcible expulsion.

"American Jews, indeed Jews from anywhere in the world, can come to Israel and be granted automatic citizenship. But Palestinians whose families have lived here for centuries do not enjoy the same right," said Sam Bahour, a US citizen of Palestinian descent who has led the campaign to reverse the policy.

He returned from America to his grandfather's home in the West Bank in the 1990s, and had been staying on tourist visas until last month when he was issued a final one-month permit and had to prepare to leave.

But after contacting influential American and Israeli friends and starting an internet movement to log victims of the policy, Mr Bahour was granted a new tourist visa after all.

The fact that Israel's about-turn has been achieved by talks rather than the gun has heartened weary observers of Israeli-Palestine relations.

A vigorous advocacy campaign by Palestinian-Americans in the US, echoing the kind more usually associated with Washington's pro-Israeli groups, is credited with getting America to bring pressure on Tel Aviv.

Mr Bahour's success will be welcome news for the likes of Enayeh Samara, who has had to renew her three-month tourist visa 125 times since returning to the Palestinian territories.

After a recent trip to Jordan, she was barred from re-entering the West Bank by Israeli guards. She ended up having to return to Chicago, where she now speaks to her family in Ramallah daily on the telephone.

"I haven't seen her since May," said her daughter, Samara. "They told her she needed a residency permit but she has applied for 31 years and they didn't give her one."

At the US consulate in Israel, Micaela Schweitzer-Bluhm, a spokesman, said America was "very concerned" about current Israeli policy. "Lots of Palestinian Americans have told us they are facing this problem," she said.

Mark Regev, from the Israeli foreign ministry, said the refusal to extend tourist visas was purely a "bureaucratic" measure.

"There are foreign nationals with no legal status, living here as tourists while we turned a blind eye," he said. "A decision was taken that this was not a good situation."

But he admitted that Israel had failed to process residency permits, and that the new policy had drawn fire from foreign governments.

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