Two Palestinian teens have reportedly been shot dead by IDF troops during clashes outside the Ofer Prison near Ramallah on Thursday as Palestinians rallied to mark Nakba Day, which commemorates their displacement following the establishment of the State of Israel.

Unconfirmed reports named the two as Nadem Syam, 17, and Mohamad Odeh, 15. At least three others were injured in the skirmish.

Palestinians said the two had been killed by live ammunition, but Border Police sources insisted troops had only used rubber-coated bullets. The IDF said it was investigating the incident.

Earlier on Thursday Prime Minister Benjamin Netanyahu said a proposed law defining Israel as the Jewish national homeland was the best response to Nakba, or “Catastrophe,” Day.

In a statement issued just after sirens sounded in Ramallah and elsewhere across the West Bank for 66 seconds to symbolize the number of years since the Palestinians’ defeat and displacement in the 1948 war, Netanyahu said the Palestinians were remembering “the disaster of the establishment of Israel, the state of the Jewish people.”

“They teach their children with nonstop propaganda that it’s necessary to cause the disappearance of the State of Israel,” the prime minister said while touring a sports center in Jerusalem after his return from a state visit to Japan.

A Palestinian demonstrator wearing a Guy Fawkes mask takes part in a rally near the border with Israel, east of Gaza City on May 15, 2014, to mark Nakba Day (photo credit: AFP/Mohammed Abed)

A Palestinian demonstrator wearing a Guy Fawkes mask takes part in a rally near the border with Israel, east of Gaza City on May 15, 2014, to mark Nakba Day (photo credit: AFP/Mohammed Abed)

“We have many responses to this,” he said. “The first response is that we are continuing to build our country and our united capital Jerusalem, and we will also give another response to the ‘Nakba’: We will pass… a law that will demonstrate clearly to the whole world that Israel is the state of the Jewish people.”

Israel overcame the armies of surrounding Arab states as well as local Arabs who attacked after the Jewish state was declared on May 15, 1948.

Prime Minister Benjamin Netanyahu (right), and Jerusalem Mayor Nir Barkat tour the new sports arena under construction in Jerusalem, on Thursday, May 15, 2014. (photo credit: Haim Zach/GPO/Flash 90)

Prime Minister Benjamin Netanyahu (right), and Jerusalem Mayor Nir Barkat tour the new sports arena under construction in Jerusalem, on Thursday, May 15, 2014. (photo credit: Haim Zach/GPO/Flash 90)

Hundreds of thousands of Palestinians fled or were forced out during the fighting. Many of them and their descendants still live in the West Bank and Gaza Strip or in neighboring Syria, Lebanon and Jordan.

Every May 15, Palestinians hold rallies to commemorate the event — and the dispute over the fate of the dispersed Palestinians and their descendants, now numbering several million people, remains at the core of the Arab-Israeli conflict.

Their fate is also a key issue in peace talks with Israel, though those talks have produced no results. The latest US brokered peace talks between the sides, aimed at establishing a Palestinian state alongside Israel, collapsed last month.

Israel has offered to take in a small number of Palestinian refugees but insists that the rest must be resettled in a Palestinian state that will be created under a peace accord or in the countries where they now live.

“It is time for the leaders of Israel to understand that there is no homeland for the Palestinians except Palestine, and it is here we are staying,” Palestinian Authority President Mahmoud Abbas said in his Nakba Day address broadcast Wednesday night.

Palestinians hold torches marking the 66th anniversary of "Nakba," or “catastrophe” referring to their uprooting in the war over Israel's 1948 creation, in the West Bank city of Ramallah, Wednesday, May 14, 2014 (photo credit: AP/Majdi Mohammed)

Palestinians hold torches marking the 66th anniversary of Nakba, or ‘catastrophe’ referring to their uprooting in the war over Israel’s 1948 creation, in the West Bank city of Ramallah, Wednesday, May 14, 2014 (photo credit: AP/Majdi Mohammed)

“It is time to end the longest occupation in modern history,” he added.

For their part, the Palestinians have been split since 2007, when Islamic Hamas militants seized control of Gaza from forces loyal to the secular, Western-backed Abbas. Hamas now rules Gaza while Abbas and the Palestinian Authority have control of parts of the West Bank.

The two Palestinian factions have made significant reconciliation gestures recently and seem to be closer to bridging their differences.

In his address, Abbas said that ending the division is a top Palestinian priority.

Earlier Thursday, Israeli Economy Minister Naftali Bennett urged security forces to show no restraint when dealing with Israeli-Arabs protesting against the state of Israel.

“I cannot accept a nationalist striving to establish a Palestinian national entity in Israel. For that I have no tolerance,” Bennett said.

“Our overarching principles include full civil equality for Israeli Arabs, as there was for years, on the one hand, and zero tolerance for manifestations of Palestinian nationalism on the other.”