Israel's far-right Finance Minister Bezalel Smotrich threatened to set up a new settlement after each country recognized Palestinian statehood.

"For every country that unilaterally recognizes a Palestinian state, we will establish a new town (settlement) and thus bring about the demise of the delusional idea of establishing a Palestinian state that will endanger the existence of the State of Israel," Israeli daily Haaretz cited Smotrich telling a news conference.

Smotrich, who heads the extremist Religious Zionism Party, said last week’s decision to legalize five settlement outposts was "a response to the unilateral recognition of five countries" of Palestine as a state.

Last week, the Israeli Cabinet approved steps proposed by Smotrich aimed at "legalizing" five settlement outposts in the West Bank.

In the past two months, Spain, Ireland, Norway, Slovenia and Armenia recognized Palestine as a state, in a move that infuriated Tel Aviv, which vowed to take measures against these countries.

Smotrich also vowed to take the Palestinian state off the agenda by creating facts on the ground and applying what he called Israel's sovereignty over the occupied West Bank.

Settlement outposts are small communities established by illegal Israeli settlers on privately owned Palestinian land without approval from the Israeli government.

Under international law, all Jewish settlements in the occupied territories are considered illegal.