The United Nations has lambasted the Israeli government after it approved the construction of its first new settlement in the occupied West Bank in decades.

A spokesman for UN chief Antonio Guterres said that the secretary-general expressed "disappointment and alarm" at the Israeli security cabinet's decision on Thursday to build a new settlement - considered illegal under international law - on land stolen from the Palestinians.

"The secretary-general has consistently stressed that there is no Plan B for Israelis and Palestinians to live together in peace and security," Stephane Dujarric said in a statement on Friday.

"He condemns all unilateral actions ... that threaten peace and undermine the two-state solution."

The decision to build a new settlement in Emek Shilo, close to the Palestinian city of Ramallah, came less than a week after the UN criticised Israel for not taking any steps to halt construction on occupied Palestinian territory, as demanded by the UNSC in a resolution it passed in December.

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Settlements are seen as a major stumbling block to peace efforts as they are built on land the Palestinians see as part of their future state.

The Israeli government's move also drew instant condemnation from Palestinian leaders, international rights groups and activists.

Israel "continues to destroy the prospects of peace", said Saeb Erekat, a senior Palestinian official, who also criticised the UN, European Union and United States for not doing enough to punish Israel for continuing to expand settlements in the West Bank.

"Peace is not going to be achieved by tolerating such crimes," he said.

Yousef Mahmoud, a Palestinian government spokesman, said in a statement that "this new escalation reveals the persistence of the occupation government to continue opposing and obstructing all efforts exerted to resume the peace process".

International human rights group Amnesty International also condemned the decision, saying "all settlement activity ... constitutes a flagrant violation of international humanitarian law and constitutes a war crime".

Israel has long pursued a policy of constructing Jewish-only settlements on land captured in the 1967 war, with more than 600,000 Israelis currently living in illegal settlements in the West Bank and East Jerusalem.

Since the January 20 inauguration of US President Donald Trump, Israel has approved the construction of 566 housing units in three settlement areas of occupied East Jerusalem, and announced the building of 2,502 more in the West Bank.

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In a statement on Friday, Trump's administration refrained from criticising Israel's move, saying that "while the existence of settlements is not in itself an impediment to peace, further unrestrained settlement activity does not help advance peace".

"That's really a statement that's been seen by the Israelis as a green light to go ahead and build this new settlement," Al Jazeera's Imran Khan, reporting from the occupied West Bank, said.

US presidents have long maintained a close friendship with Israel, lavishing the country with aid and advanced weaponry.

The latest settlement in Emek Shilo comes weeks after Israel's Supreme Court ordered the demolition of the Amona settler outpost because it was built on private Palestinian land.

Israeli Prime Minister Benjamin Netanyahu had promised to build a new colony for its residents after their eviction.

Al Jazeera's Khan said the cabinet's decision came as Netanyahu faced growing pressure in the Knesset and the threat of early elections.

"[Netanyahu] needs to placate his domestic vote base and that is the settlers - it's a large part of who supports him and the settlers are really happy about this latest announcement," he said.

In recent years, construction had focused on expanding existing settlements, making this the first entirely new settlement that an Israeli government has approved since 1991, the anti-settlement NGO Peace Now said.

The new settlement's location was "strategic for the fragmentation of the West Bank", the group said.

"Netanyahu is held captive by the settlers, and chooses his political survival over the interest of the state of Israel," the NGO said, adding it was pushing Israelis and Palestinians closer to "apartheid".