Quebec's Court of Appeal has upheld a ruling that Palestinian villagers trying to sue two Montreal companies operating on the West Bank need to go through Israel's legal system.

The West Bank village of Bil'in is disputing the companies' condominium development, alleging they violated international law by building Israeli settlements on occupied territory.

The claim was filed against sister companies Green Park International and Green Mount International, which built on land that was part of a Palestinian village until Israel took the West Bank from Jordanian control in the Six Day War in 1967.

Bil'in's city council and other residents filed the lawsuit in Quebec Superior Court, trying to get the case heard in the province.

The heart of the lawsuit was the claim that Israel would not hear the case because it has not ratified the Geneva Convention ban on settlement expansion in occupied territories.

The case went to trial and the villagers lost, but they turned to the Court of Appeal.

A three-judge panel decided Wednesday that Israel is the right jurisdiction to resolve the lawsuit.

Quebec's highest court said lawyers for Bil'in never presented evidence proving Israel's courts were unwilling or unable to deal with the issue.

The ruling added that it requires a great deal of imagination to claim Bil'in's case has a serious connection to Quebec.