An annual US government report on human rights worldwide in 2017 has dropped reference to the Palestinian territories as “occupied”.

US State Department’s annual human rights report released Friday stops using the phrase “Occupied Territories” to describe Palestinian lands West Bank, including East Jerusalem and Gaza, which were occupied by Israel.

Turkey on Sunday criticized the US State Department's report for privileging the views of terrorist-linked sources and ignoring the facts.

Turkey is “deeply disappointed” by the report, the Foreign Ministry said in a statement on the annual report, released on Friday.

“The present report is based on a distant understanding of responsibility by presenting the allegations and accusations of terrorist-related circles as real” it added. The report is 'filled with allegations and claims in the section relevant to our country that cannot be accepted' said the ministry.

US ambassador to Israel, David Friedman, a staunch supporter of Israel’s illegal settlement policy in the occupied territories, had asked the State Department in December to stop referring to the occupied territories as “occupied.”