Palestinian President Mahmoud Abbas has apologised following a speech he made this week widely condemned as anti-Semitic.

He said it was the "social functions" of Jews, including money-lending, that caused hatred toward them in Europe.

He also said there was no historical "basis for the Jewish homeland".

The speech drew criticism around the world that Abbas perpetuated anti-Semitic stereotypes and ignored deep Jewish historical connections to the Holy Land.

Palestinian officials say Mr Abbas was under intense pressure from diplomats to apologise.

"If people were offended by my statement ... especially people of the Jewish faith, I apologise to them," news agency Wafa quoted Abbas as saying.

Israel's defence minister later lashed out at Abbas on Twitter, rejecting his apology.

"Abu Mazen is a wretched Holocaust denier who wrote his doctorate on Holocaust denial and later also published a book about Holocaust denial," Avigdor Lieberman tweeted, referring to Abbas by his nickname.

"His apology is not accepted," he added.