Fifteen European nations on Friday urged Israel to drop plans for thousands more settler homes in the West Bank, warning that they "stand in the way" of lasting peace between Israelis and Palestinians.

"The new housing units would constitute an additional obstacle to the two-state solution," said the countries in a statement issued by their foreign ministries.

"Israeli settlements are in clear violation of international law and stand in the way of a just, lasting and comprehensive peace between Israelis and Palestinians," they added.

Israel advanced plans on Thursday for 4,427 housing units for Jewish settlers in the occupied West Bank, an Israeli non-governmental organisation said.

The Civil Administration's high planning committee gave final approval to 2,791 units and initial endorsement for another 1,636 units, said Peace Now, an organisation that closely monitors Israeli settlement building.

Israel seized the West Bank and east Jerusalem from Jordan in 1967. Since then, nearly 700,000 Israelis have moved into settlements.