GAZA, Dec 22 (Reuters) - Israeli troops shot dead at least two Palestinians and wounded about 60 with live fire on Friday, the Health Ministry in Gaza said, as protests intensified against Washington's recognition of Jerusalem as Israel's capital.
A U.N. General Assembly resolution passed on Thursday, rejecting U.S. President Donald Trump's Dec. 6 Jerusalem declaration, did little to calm Palestinian anger over his reversal of decades-old U.S. policy on the contested holy city.
Instead, thousands of Palestinian protesters, many of them throwing rocks, confronted Israeli security forces along the Gaza border fence, in all of occupied West Bank's seven cities and in East Jerusalem.
In Bethlehem, the traditional birthplace of Jesus, smoke from burning tyres billowed in the street, just two days before Christmas celebrations.
Israeli gunfire killed two Palestinians in a confrontation in the southern Gaza Strip, a spokesman for the Palestinian Health Ministry said, putting the number of wounded at 120, half of them shot with live ammunition and the rest struck by rubber bullets or hit by tear gas canisters.
In a statement, the Israeli military said some 2,000 Palestinians had faced off against the troops at the Gaza border fence. It said the crowd threw stones and rolled burning tyres at soldiers, who responded with "riot dispersal" measures and "fired live rounds selectively towards main instigators".
Protesters chanted "Trump is a coward. Trump is a fool". Among the wounded was a man dressed as Santa Claus.
Palestinian health officials said at least one Palestinian suffered a live bullet wound in the West Bank and some 30 protesters were hit by rubber bullets. The military, putting the number of demonstrators at about 1,700 and the injured at six, said troops faced firebombs, rocks and burning tyres.
The protests died down after sunset. Demonstrations have been held daily since Trump's announcement. Palestinian President Mahmoud Abbas, in a Christmas message, called the U.S. leader's move "an insult to millions of people worldwide, and also to the city of Jerusalem".
"HOUSE OF LIES"
Israel considers Jerusalem its eternal and indivisible capital. Palestinians want the capital of an independent Palestinian state to be in the city's eastern sector, which Israel captured in the 1967 Middle East War and annexed in a move never recognised internationally.
Most countries regard the status of Jerusalem as a matter to be settled in an eventual Israeli-Palestinian peace agreement, although that process is now stalled.
A total of 128 countries voted for the U.N. resolution. Nine opposed it and 35 abstained. Twenty-one countries did not cast a vote.
Sami Abu Zuhri, a spokesman for Gaza's dominant Hamas Islamists, called the U.N. vote a defeat for Trump, while Israeli Prime Minister Benjamin Netanyahu rejected the resolution as "preposterous" and branded the U.N. a "house of lies".
But Michael Oren, Israel's deputy minister for diplomacy, seemed to play down the support for the resolution shown by many countries Israel considers friends.
"We have an interest in tightening our bilateral relations with a long list of countries in the world, and expect and hope that one day, they will vote with us, or for us in the United Nations," Oren said on Tel Aviv radio station 102 FM.
"But I am not prepared to suspend all cooperation with important countries, such as India," he said. Netanyahu, who hosted Indian Prime Minister Narendra Modi in July, is due to visit New Delhi next month.
Friday's deaths in Gaza raised to 10 the number of Palestinians killed by Israeli gunfire since Dec. 6, Palestinian health officials said.
Gaza militants have also fired rockets into Israel, and two gunmen were killed in an Israeli air strike after one such attack. There have been no Israeli fatalities or significant injuries.
Amnesty International on Friday called on Israeli authorities to stop using "excessive force".
"The fact that live ammunition has been used during protests in Gaza and the West Bank is particularly shocking," it said.
In the run-up to the U.N. vote, Trump threatened to cut off financial aid to countries that supported the resolution. His warning appeared to have some impact, with more countries abstaining and rejecting the document than usually associated with Palestinian-related resolutions.
But most of the European Union, Israel's biggest trading partner, and countries such as Greece, Cyprus and India, with which Netanyahu has pursued closer relations and economic ties, backed the resolution.
"I prefer we have tight bilateral relations over a situation in which we don't have close bilateral relations, and they vote in our favour in the United Nations," Oren said, describing India's vote as "certainly disappointing". (Additional reporting by Ali Sawafta in Ramallah and Michelle Nichols at the U.N.; Writing by Jeffrey Heller; Editing by Andrew Roche)