Turkish President Recep Tayyip Erdogan has branded Israel the 'most fascist, racist state' in the world after Israel's parliament passed a new law defining the country as the nation state of the Jewish people.

'This measure has shown without leaving the slightest room for doubt that Israel is the world's most Zionist, fascist and racist state,' Erdogan said in a speech to his ruling party.

In one of his toughest recent onslaughts against Israel, Erdogan claimed there was 'no difference between Hitler's obsession with the Aryan race and Israel's understanding that these ancient lands are meant only for Jews.'

'The spirit of Hitler, which led the world to a great catastrophe, has found its resurgence among some of Israel's leaders,' he added.

'The spirit of Hitler, which led the world to a great catastrophe, has found its resurgence among some of Israel's leaders,' Erdogan said

Around six million Jews were killed in the Holocaust by the Nazis during World War II.

The legislation, adopted after a tumultuous Knesset session, makes Hebrew the national language and defines the establishment of Jewish communities as being in the national interest.

Arabic, previously considered an official language, was granted only special status.

Israel's Prime Minister Benjamin Netanyahu responded by saying Turkey was becoming a 'dark dictatorship'.

'Erdogan is massacring Syrians and Kurds and has imprisoned tens of thousands of his citizens,' Netanyahu said in a statement.

'Turkey under Erdogan is becoming a dark dictatorship, while Israel is meticulously maintaining equal rights for all its citizens, before and after the law.'

The issue of the bill is the latest source of tension between Israel and Turkey, one of the Jewish state's few key Muslim partners.

Ankara ordered out Israel's ambassador in May over the killing of protesters along the border with the Gaza Strip.

The strains have threatened a 2016 deal on normalising ties after the crisis sparked by the May 2010 deadly storming of a Turkish ship by Israeli commandos.

The legislation, adopted after a tumultuous Knesset session (pictured), makes Hebrew the national language and defines the establishment of Jewish communities as being in the national interest

Erdogan regards himself as a champion of the Palestinians and has twice recently held summits of Muslim states to denounce the recognition by the United States of Jerusalem as Israel's capital.

But analysts note that behind the rhetoric economic ties remain strong, with trade robust and both sides interested in the export of Israeli energy resources to Turkey.

Arab citizens account for 17.5 per cent of Israel's more than eight million population. They have long complained of discrimination.