The United Nations' first report on the broad policy of Israeli settlements concluded Thursday that the government's practice of "creeping annexation" clearly violates the human rights of Palestinians, and called for the country to immediately stop the practice.

In its report to the 47-nation Human Rights Council, a panel of investigators said Israel is violating international humanitarian law under the Fourth Geneva Convention, one of the treaties that establish the ground rules for what is considered humane during wartime.

The Israeli government has persisted in settling Palestinian-occupied territorities, including East Jerusalem and the West Bank, "despite all the pertinent United Nations resolutions declaring that the existence of the settlements is illegal and calling for their cessation," the report said.

About 250 settlements in the West Bank, including East Jerusalem, have been established since 1967 and they hold an estimated 520,000 settlers, according to the UN report. The settlements impede Palestinian access to water resources and agricultural lands, it said.

The settlements are "a mesh of construction and infrastructure leading to a creeping annexation that prevents the establishment of a contiguous and viable Palestinian State and undermines the right of the Palestinian people to self-determination," it concludes.

"All nations should be responsible for their actions, including the clear violations which are represented by the occupation state, the settlements and the illegal wall, which should be done away with," Palestinian Authority spokesperson Noor Odeh said from the West Bank city of Ramallah, after the report was released.

The panel's report to the UN's top human rights body immediately drew the condemnation of Israel, whose foreign ministry accused the council of taking a systematically one-sided and biased approach towards Israel, with the report being merely "another unfortunate reminder" of that bias.

But French judge Christine Chanet, who led the panel, said Israel never co-operated with the probe, which the council ordered last March. At a news conference, she called the report "a kind of weapon for the Palestinians" if they want to take up their grievances before the International Criminal Court in The Hague.

The independent UN investigators interviewed more than 50 people who came to Jordan in November to testify about confiscated land, damage to their livelihoods including olive trees, and violence by Jewish settlers, according to the report.

Another panel member, Pakistani lawyer Asma Janangir, said the Israeli settlements "seriously impinge on the self-determination of the Palestinian people" — an offence under international humanitarian law.

Israel says report hampers peace efforts

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Canada's government said settlements like E1 do not help the peace process. (Uriel Sinai/Getty)

Israel's foreign ministry said the report won’t help soothe tensions in the region, which flared up last November as Hamas launched missiles into Israel while Israel launched air strikes and targeted attacks against Hamas leaders. The fighting was the region’s worst in four years.

"The only way to resolve all pending issues between Israel and the Palestinians, including the settlements issue, is through direct negotiations without pre-conditions," the Israeli foreign ministry said.

"Counterproductive measures — such as the report before us — will only hamper efforts to find a sustainable solution to the Israel-Palestinian conflict."

In December, Israel announced plans to build 3,000 more settler homes in the West Bank and east Jerusalem after the Palestinian Authority became a non-member observer state at the UN.

Canada — which also voted against the Palestinian authority's statehood bid — condemned the move, calling the settlements are a "serious obstacle" to peace.

"Unilateral actions on either side do not advance the peace process," the spokesperson for Foreign Affairs Minister John Baird said.