Israel has decided to suspend a new segregated travel rule which separates Palestinian and Jewish passengers on buses travelling to the West Bank.

The defense ministry launched a three-month trial on May 20, but within hours PM Benjamin Netanyahu said it was “unacceptable”.

Groups representing Jewish settlers have been campaigning for segregated travel on security grounds.

Human rights groups described the measures as shameful and racist.

About 500,000 Jews live in more than 100 settlements built since Israel’s 1967 occupation of the West Bank and East Jerusalem. The settlements are considered illegal under international law, though Israel disputes this.

The travel rules put in place by the Israeli defense ministry for a trial period would have applied to the tens of thousands of Palestinian workers who legally travel through checkpoints to work in Israel every day.

Instead of being free to travel home from Israel on any bus heading to the West Bank, the workers would have been required to return only on buses which went back to the checkpoint where they entered Israel – thus denying them access to shared buses which do not go to the checkpoints.

The effect would have been to segregate Jewish and Palestinian passengers onto different buses.

The leader of Israel’s opposition, Yitzhak Herzog of the Zionist Union, wrote on his Facebook page that the move was “a needless humiliation, a stain on the country’s face and citizens”, and had nothing to do with security.

Yariv Oppenheimer, from the campaign group Peace Now, said: “When something looks like apartheid and smells like apartheid, then it’s apartheid.”

Many Jewish settlers who use the same buses to travel back to their own communities argue that allowing Palestinian passengers onto the buses creates a security risk.