UN Secretary-General Antonio Guterres is disappointed and alarmed by Israel's decision to build a new West Bank settlement and has condemned the move, his spokesman said on Friday.

Israel's security cabinet on Thursday approved the building of the first new settlement in the occupied West Bank in two decades, even as Prime Minister Benjamin Netanyahu negotiates with Washington on a possible curb of settlement activity.

The Israeli government also voted for the expropriation of 222 acres of Palestinian land in the West Bank.

"He condemns all unilateral actions that, like the present one, threaten peace and undermine the two-state solution," UN spokesman Stephane Dujarric said in a statement.

Sweden's UN Ambassador Olof Skoog, a member of the Security Council, said on Friday that the 15-member body should respond to the latest announcement by Israel on settlements.

"The urgency of the situation and the deterioration on the ground might call for some sort of Security Council action, although we know that finding unity on this is not easy," he told reporters.

The French Foreign Ministry "strongly" condemned Israel's actions, saying that they exacerbate tensions on the ground.

"France recalls that colonization is illegal under international law, in particular UNSCR 2334," the ministry said in a statement.

The UN Security Council adopted a resolution in December demanding a halt to Israeli settlement building.

British Foreign Minister Boris Johnson said settlement building and expropriating Palestinian land violate international law and undermine the prospect of a two-state solution.

“As a strong friend of Israel, and one prepared to stand up for Israel when it faces bias and unreasonable criticism, I urge Israel not to take steps such as these, which move us away from our shared goal of peace and security and make it harder to achieve a different relationship between Israel and the Arab world,” Johnson said in a statement.

Germany also condemned Israel’s decision.

"The federal government expects the Israeli government to clarify which solution they are pursuing for a lasting peace with the Palestinians," a German Foreign Ministry spokesperson said, according to Haaretz. "Germany will not recognize any change in the 1967 lines, which has not been agreed between the parties."

However, US President Donald Trump's administration refrained from criticising the new settlement, but warned that unchecked expansion could undermine peace efforts.

"While the existence of settlements is not in itself an impediment to peace, further unrestrained settlement activity does not help advance peace," a White House official said.

"Going forward... the Israeli government has made clear that Israel's intent is to adopt a policy regarding settlement activity that takes President Trump's concerns into consideration."