Britain, Australia and Canada have called on Israel's government to reverse a decision to approve new illegal settlement homes in the West Bank, saying they are "deeply concerned" by an ongoing cycle of violence.

"The continued expansion of settlements is an obstacle to peace and negatively impacts efforts to achieve a negotiated two-state solution. We call on the Government of Israel to reverse these decisions," the foreign ministers of Britain, Australia and Canada said in a joint statement on Friday.

This week, Israel approved over 5,700 new illegal settlement homes in the occupied West Bank and earlier this month instituted changes to the settlement approval process which facilitate swifter approval of construction.

Violence has been surging in the Israel-occupied West Bank, including deadly clashes in Jenin, a fatal shooting near an illegal Jewish settlement, attacks on Palestinian villages by rampaging settlers, and rare use of Israeli air power against Palestinian fighters.

The latest illegal expansion announcement has sparked a wide range of criticism from countries and international organisations including the UN.

On Friday, Spain rejected the expansion of illegal Israeli settlements in occupied Palestinian territories and condemned violence by armed settlers, calling Tel Aviv's decision contrary to international law and an impediment to peace.

"The Government of Spain rejects the measures approved this week on Israeli settlements in the occupied Palestinian territories in the West Bank and condemns the violence exercised by settlers," Foreign Ministry said in a statement.

The ministry noted that the illegal settlements are contrary to international law, are an obstacle to peace, and hinder the realisation of the two-state solution.