RAMALLAH, November 2 (JMCC) - Palestinian Prime Minister Salam Fayyad participated in the inauguration of two schools in the Jerusalem area Tuesday morning, speaking to crowds at one of them by telephone, after Israeli officials banned his visit.

Fayyad visited a school in Dahiyat al-Barid, just bordering the Israeli-drawn Jerusalem city limits. The ceremony at Anata, which is partly under Israeli control, was held without the Palestinian prime minister's physical presence, although he gave a speech by telephone.

Fayyad called on Palestinians to continue their steadfastness, saying that the building of new schools in the Jerusalem area was a sign of strength and a harbinger of the Palestinian state.

Israeli officials issued an order Monday prohibiting Palestinian officials from holding ceremonies in the city of Jerusalem, which is currently under Israeli security. Palestinians hope that the city will someday be their capital.

The spat erupted late last week after Fayyad announced plans to open two renovated schools in the occupied and annexed eastern sector of the city, both of which lie on the West Bank side of Israel's giant separation barrier which snakes through the city.

However, one of the schools is located in the Arab neighbourhood of Anata, part of which falls within the Israeli municipal boundaries of Jerusalem -- an area which is considered off-limits for any official activity by the Palestinians.

Following pressure and protests by right-wing lobby group Forum for the Land of Israel, Prime Minister Benjamin Netanyahu on Monday ordered the security establishment to bar Fayyad from officiating at the opening ceremony in Anata.

Prime Minister Benjamin Netanyahu ordered during a meeting with the security establishment not to let the Palestinian Authority conduct events and ceremonies in the municipal area of Jerusalem, a statement from his office said late on Monday.

Immediately afterwards, Israel's Interior Minister Yitzhak Aharonovitch issued a warrant barring all Palestinian Authority officials from holding events in Israeli territory without special permission.

Any such events would be stopped by the police, said the warrant.

Fayyad aide Ghassan Khatib told AFP late on Monday that the premier would go ahead with the planned opening of the school in Dahiyat al-Barid, which is located just outside the municipal boundaries and therefore of no interest to Israel, but he would not be opening the school in Anata.

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