The British advertising watchdog has banned an Israeli tourism advertisement for referring to the Old City of al-Quds Jerusalem as part of Israel.

The brochure portrayed a panorama of the walled Old City with a text saying "Israel has it all", and was ruled incorrect by the Advertising Standards Authority (ASA), AFP reported on Wednesday.

ASA said that the advertisement implied that the UNESCO World Heritage Site was part of Israel and not part of the occupied Palestinian territory, which is quite contrary to the international community’s regard.

Following the compliant, ASA ruled that such ads were misleading and banned them from further use.

"We therefore considered the presentation of the ad would mislead consumers into believing that the Old City of Jerusalem was part of Israel," the watchdog said.

Palestinians are seeking to create an independent state on the territories of the West Bank, East al-Quds Jerusalem, and the besieged Gaza Strip and are demanding that Israel withdraw from the occupied Palestinian territories.

Tel Aviv, however, has refused to return to the 1967 borders and is unwilling to discuss the issue of al-Quds.