The annual figures, published by the Israeli government on Wednesday, are closely watched as Israel fears that without steady immigration of Jews from elsewhere in the world the Palestinian minority could eventually outnumber the Jewish population.


Jews now comprise 76% of Israel's population of 6.86 million people while Palestinians with Israeli citizenship make up 20%.


After soaring to between 70,000 and 200,000 a year after the collapse of the Soviet bloc, immigration has plunged since 2000 due to Palestinian-Israeli violence and a poor economy.


The Central Bureau of Statistics said the figure slipped by 10% last year to 21,000 people, despite a drop in the violence and an economy that emerged from recession, with unemployment falling to 10% from an 11% peak.


Immigration from France and the United States bucked the trend. Just over 2,000 people moved to Israel from France in 2004, a 12% rise. The US figure also rose 12%, to 1,890 people.


Prime Minister Ariel Sharon has said he aims for one million North American immigrants over the next decade.