(Reuters) -Israel's government has approved 22 new Jewish settlements in the occupied-West Bank, Finance Minister Bezalel Smotrich said on Thursday, a move that could deepen divisions with some allies, who have threatened sanctions over further expansion.

Far-right Smotrich, an advocate for Israeli sovereignty over the West Bank, wrote on X that the new settlements would be located in the northern area of the West Bank, without specifying where.

Israeli media cited the Defense Ministry as saying that among the new Jewish settlements, existing "outposts" would be legalised and new settlements would also be built. 

Around 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem, territories Israel captured from Jordan in the 1967 war. Israel later annexed East Jerusalem, a move not recognized by most countries, but has not formally extended sovereignty over the West Bank.

Palestinians see expansion of the settlements as a hindrance to their aspirations to establish an independent Palestinian state in the Gaza Strip and the West Bank, including occupied East Jerusalem.

There is a growing list of European countries demanding that Israel end the war in Gaza, while Britain, France and Canada this month warned Israel it could impose targeted sanctions if Israel continued to expand settlements in the West Bank.

Most of the international community considers the Jewish settlements illegal. The Israeli government deems settlements legal under its own laws, while some so-called "outposts" are illegal but often tolerated and sometimes later legalised. 

Settlement activity in the West Bank has accelerated sharply since the war in Gaza, now in its 20th month, adding to escalating Israeli military operations against Palestinian militants and increasing numbers of settler attacks targeting Palestinian residents.

Nabil Abu Rudeineh, a spokesperson for Palestinian President Mahmoud Abbas, called Israel's decision a "dangerous escalation", accusing the government of continuing to drag the region into a "cycle of violence and instability".

"This extremist Israeli government is trying by all means to prevent the establishment of an independent Palestinian state," he told Reuters, urging U.S. President Donald Trump's administration to intervene. 

Hamas official Sami Abu Zuhri condemned the announcement and called on the United States and the European Union to take action.

"The announcement of the building of 22 new settlements in the West Bank is part of the war led by Netanyahu against the Palestinian people," Abu Zuhri told Reuters.

(Reporting by Alexander Cornwell, Ali Sawafta, Nidal Al-Mughrabi; Editing by Sharon Singleton)