The order, designed to prevent infiltration by terrorists, defines anyone who enters the West Bank illegally as an infiltrator, as well as "a person who is present in the area and does not lawfully hold a permit."
It would make tens of thousands of Palestinians from the West Bank criminal offenders liable to punishment of up to seven years in prison, the report says.
Haaretz said the first Palestinians likely to be targeted would be those who have lost their residency status and have ID cards with home addresses in the Gaza Strip, people born in Gaza and their West Bank children or those born in the West Bank or abroad.
Israeli civil courts in the past have prevented the expulsion of those groups from the West Bank, but the new order puts them under the jurisdiction of Israeli military courts, the report said.
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