Israel must immediately start withdrawing its settlers from the Palestinian territories, the United Nations said on Thursday in a report that the Jewish state immediately dismissed as "biased."

"Israel must... cease all settlement activities without preconditions (and) must immediately initiate a process of withdrawal of all settlers" from the occupied territories, said a report commissioned by the UN's Human Rights Council last March.

Because of the settlements, Palestinians' human rights "are being violated consistently and on a daily basis," the three independent experts said in the report.

Israeli quickly rejected the report, ratcheting up tensions that this week saw the Jewish state become the first country to ever boycott a rights review by the UN body.

"The Human Rights Council has sadly distinguished itself by its systematically one-sided and biased approach towards Israel. This latest report is yet another unfortunate reminder of that," foreign ministry spokesman Yigal Palmor said in a statement.

Israel settling its population into occupied territory falls "into the provision of article eight of the ICC (International Criminal Court) statute... on war crimes," Christine Chanet of France, who chaired the mission, told reporters in Geneva.

She said it was unclear if the ICC could prosecute Israel for such crimes.

The experts, who will present their findings to the 47-member state council on March 18, also called on Israel to "ensure adequate, effective and prompt remedy to all Palestinian victims... of human rights violations that are a result of the settlements".

The council's decision to dispatch the fact-finding mission to determine what impact the settlements are having on the rights of Palestinians so enraged the Jewish state that it immediately cut all ties with the body.

Chanet along with Asma Jahangir of Pakistan and Unity Dow of Botswana, published their findings just two days after Israel became the first nation to boycott a regular review by the UN rights council.

Israel has come under widespread international criticism for ramping up its construction of settlements in the Palestinian territories, notably in the occupied east Jerusalem, which the Palestinians want to establish as the capital of their future state but that Israel considers part of its "indivisible" capital.

All Israeli settlements on Palestinian land beyond the so-called 1949 Green Line are considered illegal under international law.

"Settlements are being maintained and developed through a system of total segregation between the settlers and the rest of the population" in the territories, the report found, adding that Israeli military and police helped maintain the segregation "to the detriment of the rights of the Palestinian people."

The report authors were not permitted to travel to Israel or the Palestinian territories for their mission but instead relied on a wide range of interviews.

Through these interviews, Jahangir said the experts, who she stressed were "neutral", had seen agony.

The report lists a long list of breaches, including to freedom of self-determination, non-discrimination, freedom of movement, equality, due process, fair trial, arbitrary detention, freedom to access places of worship, education, water and housing, which were "interrelated, forming part of an overall pattern."

For instance, the experts noted that different legal systems and standards apply to Palestinians and their settler neighbours.

Settlers who commit violent acts against Palestinians are seldom held accountable, the report said, with a study by the Israeli Yesh Din rights group showing that more than 91 percent of such cases between 2005 and 2012, were closed without indictment.

In comparison, between 90 and 95 percent of cases of violence committed by Palestinians against settlers were investigated and went to court.

Arbitrary arrests and detentions of Palestinians were also common, pointing out that last year some 4,100 Palestinians were held in Israeli military detention -- 21 of them under the age of 16.

The report pointed out that since the 1967 Six Day War that saw Israel capture the Gaza Strip, the Golan Heights, the West Bank and east Jerusalem, some 250 settlements had been built in the latter two and today are home to an estimated 520,000 settlers.

The settlements are "leading to a creeping annexation that prevents the establishment of a contiguous and viable Palestinian State," the report found.