Normally, when Israelis and Palestinians row over the Green Line, the grievance is predictable - both claim authority over the same piece of land. But in an unusual court case, a Palestinian is advancing claims of Israeli jurisdiction.

Last week Nazer Fukra asked the Tel Aviv labour court to declare that the Nitzanei Shalom industrial zone, which lies on a spot of uncertain sovereignty right on the Green Line, should be considered Israeli.

From 2000 to 2008 he worked at Solor Gas Industries in Nitzanei Shalom, where he was paid less than half of the Israeli minimum wage and failed to receive social benefits mandated by Israeli law. He claims he is owed NIS 186,000 (£32,000).

Palestinians who work inside Israel's pre-1967 borders are entitled to the national minimum wage of NIS 20.70 (£3.55) per hour, and following a number of court cases in the last decade, unless employer and employee decide otherwise, the same applies to Palestinians working in settlements.

But Nitzanei Shalom, home to several Israeli heavy industry firms, does not fit in to either of these categories. It was established in 1995 under the Oslo Accords, whose architects hoped that having industrial areas on the buffer zone would help the cause of peace.

Today "buds of peace" - as the Hebrew name translates - is a heavily guarded complex. Israelis get in and out of the complex through a special gate in the security barrier, a short drive from Kfar Saba. Palestinians enter and leave through a gate into the Palestinian Authority-controlled Tulkarm governorate, where Mr Fukra lives.

Some companies in Nitzanei Shalom are convinced that the area is not only extra-territorial in feel but also in law, and do not pay the Israeli minimum wage or provide Israeli-style benefits. According to the court documents, Solor Gas Industries, Mr Fukra's former employer, assumes itself to be bound only by the legal system that was in place in the West Bank before 1967, namely the Jordanian law of the time.

Amit Doron, general manager of Solor Gas Industries, insisted that Mr Fukra was paid "according to his entitlements".

Oron Meiri, Mr Fukra's lawyer, said that this "is against private international law, which is based on who has the closest ties to the territory. As an Israeli company, paying in shekels, selling to the Israeli market, it should be classed as Israel."

Mr Fukra's case could prove a test case. Kav Laoved, a non-profit that advocates on behalf of "disadvantaged workers" in Israel and the West Bank, estimates that several hundred workers in Nitzanei Shalom get less than the Israeli minimum wage.

Hedva Issachar, a Kav Laoved board member, believes that the zone conceived by the hopeful Oslo Process has become an "ugly secret". Mr Meiri said that the vision of its establishment has turned "sour".