* Says 11,000 Palestinians forced to quit E.Jerusalem since 1996
* Casts doubt on progress in U.S.-brokered peace process
By Stephanie Nebehay
GENEVA, March 21 (Reuters) - A U.N. human rights investigator accused Israel on Friday of "ethnic cleansing" in pushing Palestinians out of East Jerusalem and cast doubt that the Israeli government could accept a Palestinian state in the current climate.
He spoke against a backdrop of deadlocked peace talks and accelerating Israeli settlement expansion in the occupied West Bank and East Jerusalem which Palestinians say is dimming their hope of establishing a viable state on contiguous territory.
Israel says Palestinian refusal to recognise it as a Jewish state is the main obstacle. U.S. President Barack Obama this week pressed Palestinian President Mahmoud Abbas to help break the impasse, saying both sides must take political risks before the April 29 deadline for a framework deal.
Richard Falk, United Nations special rapporteur on human rights in the Palestinian territories, told a news conference that Israeli policies bore "unacceptable characteristics of colonialism, apartheid and ethnic cleansing".
"Every increment of enlarging the settlements or every incident of house demolition is a way of worsening the situation confronting the Palestinian people and reducing what prospects they might have as the outcome of supposed peace negotiations."
Asked about his accusation of ethnic cleansing, Falk said that more than 11,000 Palestinians had lost their right to live in Jerusalem since 1996 due to Israel imposing residency laws favouring Jews and revoking Palestinian residence permits.
"The 11,000 is just the tip of the iceberg because many more are faced with possible challenges to their residency rights."
This compounded the "ordeal of this extended, prolonged occupation", according to Falk, an international law expert and professor emeritus at Princeton University in the United States.
Israel captured the West Bank, Gaza Strip and East Jerusalem in the 1967 Middle East war and later annexed the latter, declaring it part of its eternal, indivisible capital, a move never recognised internationally.
Palestinians seek a state in the West Bank and Gaza with East Jerusalem as their capital. In 2005 Israel quit Gaza, now run by Hamas Islamists opposed to Abbas' peace efforts, but settlement growth continues in the West Bank and East Jerusalem.
Falk said that Israel had made a systematic effort to "change the ethnic composition" of East Jerusalem by making it more difficult for Palestinians to reside there while encouraging the spread of settlements, which are considered illegal under international law.
In a report last month, Falk said Israeli policies in the West Bank appeared to amount to "apartheid and segregation" with a de facto annexation of parts of the territory, denying the Palestinian right to self-determination.
There was no immediate Israeli response to his remarks on Friday. Israel has not responded officially to Falk's February report via the president of the U.N. Human Rights Council, the usual channel, U.N. officials in Geneva said.
In the past Israel has strongly denied accusations of persecuting Palestinians, accusing them of inciting anti-Israeli violence and being unwilling to make permanent peace with the Jewish state.
"DRIFT TO THE RIGHT"
Direct peace negotiations usually coincide with intensified Israeli settlement activity, he told reporters.
The U.S.-brokered peace process seemed to be primarily a project of Secretary of State John Kerry who had received only "minimal support from Obama himself", Falk said.
"There are other reasons for encouraging the idea that it's still possible to negotiate a settlement based on the two-state model, even though most informed observers regard it as highly implausible given the changes that have taken place during the period of occupation and given the outlook of the Netanyahu government," he said, making clear he was among the sceptics.
Even entering negotiations, he said, is seen as a "betrayal" by Israeli political factions and parties that are to the right of the government of Prime Minister Benjamin Netanyahu.
"A few years ago it would be hard to imagine that there was something to the right of Netanyahu. But gradually this drift to the right has created a whole new sense of the political debate within Israel," Falk said. "And there is a strong internal Israeli opposition to any sense that the Palestinian people in any diminished way deserve a state of their own."
Falk, an American law professor who is Jewish, has come to the end of a six-year term in the independent post and the U.N. Human Rights Council is expected to name a successor soon.
He has long drawn controversy in Israel, in 2008 comparing Israeli military strikes against Hamas in Gaza - during which 1,400 Palestinians were killed and there was widespread destruction in densely populated areas - to those of the Nazis.
Last June he said critics who called him anti-Semitic sought to divert attention from his scrutiny of Israeli policies.
He is to address the U.N. Human Rights Council on Monday, but it was not clear whether Israeli delegates would attend due to an ongoing strike by Israeli foreign ministry staff.
(Editing by Mark Heinrich)