The chairman of Orange told AFP on Saturday that he "sincerely" regretted a "controversy" over the French telecoms group's relations with Israel, saying, the Orange Group "is in Israel to stay".

Stephane Richard denied that the company's decision to end its brand-licensing agreement with Partner, Israel's second largest mobile operator, "as soon as possible from a contractual point of view", in any way implied that Orange was seeking to withdraw from the Jewish state.

But Richard touched off a firestorm of criticism on Wednesday when he told reporters in Cairo he was ready to "withdraw Orange brand from Israel".

He said at the time it was a purely business decision, not political, that Orange does not license its brand.

The comments touched a raw nerve in Israel, which is growing increasingly concerned about global boycott efforts and the impact on its image abroad.

A furious Israeli Prime Minister Benjamin Netanyahu slammed the decision by Orange, which is part state-owned as "miserable."

The fresh Franco-Israeli spat comes after a high-profile diplomatic row in December when French lawmakers voted in favour of recognising Palestine as a state.

France's top diplomat Fabius also said that Paris and the European Union "have a consistent policy on settlement-building that is known to all."