An Israeli human rights group says the West Bank is facing a severe water shortage largely as a result of what it calls "discriminatory" Israeli policies.

The rights group, B'Tselem accused Israel Tuesday of discrimination in the distribution of joint water resources between Jewish settlers and Palestinians. It warned that a water shortage would have serious repercussions on the economy and health of tens of thousands of Palestinians.

The group said Israel also limits the Palestinian Authority's ability to drill new wells. It said the effects of several years of drought will make a water shortage even worse in coming months.

The Israeli water company, Mekorot, denied the allegations. It said it has provided more water to the West Bank than is required under the 1993 Israel-Palestinian Oslo peace accord.

Some information for this report was provided by AFP and AP.