Announced on Sunday by Finance Minister Bezalel Smotrich and Defence Minister Israel Katz after being approved by the security cabinet, the measures include allowing Jewish Israelis to buy West Bank land directly, and extending greater Israeli control over areas where the Palestinian Authority exercises power.
The Israeli measures also envisage transferring authority over building permits for settlements in the Palestinian city of Hebron -- the West Bank's largest -- from the Palestinian Authority to Israel.
In addition, it strengthens Israeli control over two major religious sites in the southern West Bank: Rachel's Tomb near Bethlehem and the Cave of the Patriarchs in Hebron.
It was unclear when the new rules would take effect, but they do not require further approval.
UN Secretary-General Antonio Guterres was "gravely concerned" at the changes, and warned they were "eroding the prospects for the two-state solution", his spokesman Stephane Dujarric said in a statement.
Guterres called Israel's actions "destabilising" and pointed to an International Court of Justice finding that Israel's occupation of the Palestinian territory is illegal.
The West Bank, including East Jerusalem, which Israel has occupied since 1967 along with Gaza, would form the largest part of any future Palestinian state, according to the UN resolutions
Smotrich had said on Sunday that the changes aimed at "deepening our roots in all regions of the Land of Israel and burying the idea of a Palestinian state".
Earlier, eight Muslim-majority countries condemned the new Israeli measures, which pave the way for more settlements in the occupied Palestinian territory.
The foreign ministers of Egypt, Saudi Arabia, Jordan, the UAE, Qatar, Indonesia, Pakistan, and Turkey "condemned in the strongest terms the illegal Israeli decisions and measures aimed at imposing unlawful Israeli sovereignty", a Saudi statement said.
It condemned this attempt to "entrenching settlement activity, and enforcing a new legal and administrative reality in the occupied West Bank, thereby accelerating attempts at its illegal annexation and the displacement of the Palestinian people".
The Israeli measures are null and void under international law and violate UN Security Council resolutions, notably Resolution 2334, which condemns attempts to alter the demographic composition, character, and status of Palestinian territory occupied since 1967, including East Jerusalem, they added.
'Attempts to annex'
In addition to the diplomatic criticism, the announcement drew condemnation from Palestinians and experts.
The Palestinian presidency in Ramallah, which exercises limited control over some areas of the occupied West Bank, said the move was aimed at "deepening attempts to annex the occupied West Bank".
"What they want is to drive Palestinians into small pieces of land, basically, their major cities, enclaves, and the rest is gone," Palestinian political scientist and former minister Ali Jarbawi said.
Yonatan Mizrachi of Peace Now, an Israeli anti-settlement watchdog, said the steps would further weaken the Palestinian Authority, which was established under the Oslo Accords of the 1990s as an interim governing body pending the creation of a fully fledged Palestinian state.
"Israel is actually advancing annexation, and that's something that we've seen for three years, but what is also significant in this case is that Israel has also decided to weaken the Palestinian Authority," Mizrachi said.
The announcement came days ahead of Israeli Prime Minister Benjamin Netanyahu's visit to the United States, where he is due to meet President Donald Trump, who has upheld US opposition to Israeli annexation of the West Bank.
Washington has yet to formally comment on the new measures.
More than 500,000 Israelis live in settlements and outposts in the West Bank, which are illegal under international law. Another 200,000 Israelis live in Israeli-annexed east Jerusalem
Around three million Palestinians live in the territory.
The International Court of Justice has declared Israel’s policies and presence in the occupied Palestinian territory illegal, affirmed the need to end the occupation, and rejected the annexation of the territory.
Israel's decades-long occupation of the Palestinian territories is illegal and needs to end "as rapidly as possible", the UN's top court has said.
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