"The Holy See's position has not changed," negotiator Ettore Balestrero told the Vatican Radio after biannual talks between Israel and the Holy See on the status of Catholic Church property.
The comments came in response to recent concern among Palestinian officials that the Vatican was reportedly preparing to accept the application of Israeli law on Catholic Church properties in east Jerusalem.
The Palestinians said they had seen a copy of an alleged draft agreement prepared for the talks which reportedly included an implicit recognition by the Vatican of Israel's annexation of east Jerusalem.
They said the move would be a violation of international law.
Balestrero, the Vatican's undersecretary for relations with states, said Tuesday's negotiations had seen "a substantial progress" towards an agreement on Church property in Jerusalem, though no accord was signed.
The agreement regarded properties which were neither in east Jerusalem nor the West bank, he said.
Israel and the Vatican have been holding talks on the legal status of Catholic Church property in the Holy Land since 1999.
The bilateral working commission that regulates ecclesiastical property in Israel will meet again in December in Jerusalem.
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