U.S. presidential candidate Mitt Romney's overseas woes intensified on Monday as he managed to insult yet another entire nation of people — this time Palestinians — as he praised Israel's "culture" for fuelling its economic success in the Middle East.

Israeli culture, perseverance in the face of adversity and "the hand of providence" have figured prominently in why Israelis are more economically successful than Palestinians, Romney said in remarks his campaign later claimed were "grossly mischaracterized."

'I have not heard any Israeli official speak about cultural superiority.'—Saeb Erekat, senior aide to Palestinian President Mahmoud Abbas

"As you come here and you see the GDP [gross domestic product] per capita, for instance, in Israel, which is about $21,000, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality," he said.

"Culture makes all the difference. And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things," Romney said.

He added similar economic disparities exist in other parts of the world, including the United States and Mexico.

World Bank data shows Romney's numbers were way off, with Palestinians far worse off than Israelis: Israel's 2011 per capita GDP was about $31,000 in 2011, while the West Bank's and Gaza's was just above $1,500.

'Lacks information, knowledge, vision'

Palestinian leaders reacted to Romney's remarks with dismay, marking the second time in less than a week that the presumptive presidential nominee for the U.S. Republican Party has angered a nation on a trip meant to highlight his foreign policy gravitas.

"It is a racist statement, and this man doesn't realize that the Palestinian economy cannot reach its potential because there is an Israeli occupation," Saeb Erekat, a senior aide to Palestinian President Mahmoud Abbas, told The Associated Press.

"It seems to me this man lacks information, knowledge, vision and understanding of this region and its people. He also lacks knowledge about the Israelis themselves. I have not heard any Israeli official speak about cultural superiority."

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Billionaire American gambling magnate Sheldon Adelson, seen at right with wife Miriam, is a major Romney backer and was in Israel for Monday's fundraiser. (Jason Reed/Reuters )

Other Palestinian figures accused Romney of jeopardizing the stalled peace process with some of his pro-Israel stances, in particular calling Jerusalem the capital of the Jewish state.

The city's status has been a key sticking point during stalled peace talks between Israelis and Palestinians.

"Romney must understand that such an era has ended and Arab nations who are rebelling for the sake of freedom and dignity will not allow him to mess with their fates in order to win some votes," said Yasser Abed Rabbo, the Palestine Liberation Organization's secretary-general.

Romney made no mention in his speech that Israel has had control over the West Bank, the Gaza Strip and East Jerusalem since 1967. Israel withdrew from Gaza in 2005 but continues to control access and impose a blockade since the Islamic militant Hamas seized the territory in 2007. In the West Bank, Israel retains overall control, and Palestinians only have limited self-rule. Israel controls all border crossings in and out of the West Bank.

Both the World Bank and the International Monetary Fund have long argued that the Palestinian economy can only improve if Israel lifts many of its trade and movement restrictions in the occupied territories. Israeli leaders view those restrictions as vital to their country's security.

Praises Israel's universal medicare

The Romney campaign denied vehemently that he meant any offence to Palestinians in his remarks.

"This was not in any way an attempt to slight the Palestinians," Stuart Stevens, Romney's chief strategist, said Monday in Poland. Stevens wouldn't elaborate, however, on what Romney meant by "culture."

Romney's latest brouhaha didn't just startle Palestinians. Jewish publications also weighed in with criticism.

Ha'aretz, a liberal Israeli newspaper, reported that Romney's speech "sounded as if it could have been written by [Prime Minister Benjamin] Netanyahu's bureau," adding most of the audience members at the fundraiser were right-wing, religious American immigrants.

Romney also landed himself in hot water as he praised Israel's universal health-care system, which was created 17 years ago and does much the same as the health-care reforms brought in by U.S. President Barack Obama that Romney has so stridently denounced.

In his prior gaffe, last week, Romney angered British Prime Minister David Cameron, London Mayor Boris Johnson and Britons in general when he suggested London wasn't prepared for the Summer Olympic Games.

with files from Associated Press