The European Commission has strongly criticized a new Israeli law that would make the death penalty the default sentence for Palestinians convicted of lethal terrorist attacks.

"The death penalty bill in Israel is very concerning to us in the EU," a commission spokesman said on Tuesday.

Under the law, Palestinians convicted of terrorist-motivated murder by military courts in the occupied territories would face the death penalty, which judges are required to impose. The Israeli parliament approved the measure on Monday by a narrow majority.

"This is a clear step backwards, the introduction of the death penalty together with the discriminatory nature of the law," the spokesman said.

"This is a clear negative trend in terms of Israel's obligation vis-à-vis respect of human rights."

The commission has engaged with Israel on the bill, the spokesman said.