Israel has confirmed it is planning to appropriate a large tract of fertile land in the occupied West Bank, a move which has already drawn international condemnation and is likely to exacerbate tensions with Western allies.

In an email sent to Reuters, COGAT, a unit of Israel's Defence Ministry, said the political decision to seize the territory had already been taken and "the lands are in the final stages of being declared state lands".

The appropriation, first reported by Israel's Army Radio, covers 380 acres in the Jordan Valley close to Jericho, an area where Israel already has many settlement farms built on land Palestinians seek for a state.

UN Secretary General Ban Ki-moon denounced the seizure on Wednesday, which is the largest appropriation in the West Bank since August 2014.

"Settlement activities are a violation of international law and run counter to the public pronouncements of the government of Israel supporting a two-state solution to the conflict," Mr Ban said in a statement.

The land, already partly farmed by Jewish settlers in an area fully under Israeli civilian and military control, is situated near the northern tip of the Dead Sea.

A view shows Jordan Valley near the West Bank city of Jericho. ( Reuters: Mohamed Torokman )

No Palestinians currently live there.

The United States, whose ambassador angered Israel this week with criticism of its West Bank policy, said it was strongly opposed to any move that accelerates settlement expansion.

"We believe they're fundamentally incompatible with a two-state solution and call into question, frankly, the Israeli government's commitment to a two-state solution," Deputy State Department spokesman Mark Toner said.

Israeli Prime Minister Benjamin Netanyahu was scheduled to address the World Economic Forum in Davos on Thursday (local time).

It was not immediately clear if he would speak on the issue or if foreign diplomats would raise their concerns with him.

Palestinian officials have denounced the seizure, with Hanan Ashrawi, a senior member of the Palestine Liberation Organisation, calling it a violation of international law.

"Israel is stealing land specially in the Jordan Valley under the pretext it wants to annex it," Ms Ashrawi said.

"This should be a reason for a real and effective intervention by the international community to end such a flagrant and grave aggression which kills all chances of peace."

Failed peace talks, violent uprisings

The Palestinians want to establish an independent state in the West Bank, Gaza and East Jerusalem, areas Israel captured in the 1967 Middle East War.

There are now about 550,000 Jewish settlers living in the West Bank and East Jerusalem combined, according to Israeli government and think-tank statistics.

About 350,000 Palestinians live in East Jerusalem and 2.7 million in West Bank.

Israel is hoping that in any final agreement with the Palestinians it will be able to keep large settlement blocs close to Jerusalem and the Israeli border, as well as in the Jordan Valley, for security and agricultural purposes.The Palestinians are adamantly opposed.

The last round of peace talks broke down in April 2014 and Israeli-Palestinian violence has surged in recent months.

Since the start of October, Palestinian stabbings, car-rammings and shootings have killed 25 Israelis and a US citizen.

In the same period, at least 148 Palestinians have been killed, 94 of whom Israel has described as assailants.

Reuters