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Mitt Romney told Jewish donors Monday that their culture is part of what has allowed them to be more economically successful than the nearby Palestinians, outraging Palestinian leaders who called his comments racist and out of touch.

“As you come here and you see the GDP per capita, for instance, in Israel which is about $21,000 dollars, 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,” the Republican presidential candidate told about 40 wealthy donors who breakfasted around a U-shaped table at the luxurious King David Hotel.

The reaction of Palestinian leaders to Romney’s comments was swift and pointed.

“What is this man doing here?” said Saeb Erekat, a top Palestinian official. “Yesterday, he destroyed negotiations by saying Jerusalem is the capital of Israel, and today he is saying Israeli culture is more advanced than Palestinian culture. Isn’t this racism?”

The economic disparity between the Israelis and the Palestinians is actually much greater than Romney stated. Israel had a per capita gross domestic product of about $31,000 in 2011, while the West Bank and Gaza had a per capita GDP of just over $1,500, according to the World Bank.

Romney, seated next to billionaire casino owner Sheldon Adelson at the head of the table, told donors at his fundraiser that he had read books and relied on his own business experience to understand why the difference is so great.

“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, citing an innovative business climate, the Jewish history of thriving in difficult circumstances and the “hand of providence.”

Romney, in comparing the Israeli and Palestinian economies, made no mention of the fact that Israel has controlled the West Bank, Gaza Strip and east Jerusalem since capturing them in the 1967 war. Israel withdrew from Gaza in 2005, but continues to control access, and has enforced a crippling border 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, and continues to restrict Palestinian trade and movement.