(Reuters) - Israel said on Monday it has severed contacts with the U.N. Human Rights Council after its launch last week of an international investigation into Jewish settlements in the occupied West Bank.

The decision, announced by a Foreign Ministry spokesman, meant that the fact-finding team the council planned to send to the West Bank will not be allowed to enter the territory or Israel, said the spokesman, Yigal Palmor.

"We are not working with them any more," Palmor said about the Geneva- based forum. "We had been participating in meetings, discussions, arranging visits to Israel. All that is over."

The international investigation was launched on Thursday, with the United States isolated in voting against the initiative brought by the Palestinian Authority.

Israeli leaders swiftly condemned the U.N. body, saying it was hypocritical and biased toward Israel.

"They systematically and serially make all kinds of decisions and condemnations against Israel without even symbolically considering our positions," Palmor said.

He said Israel would continue to cooperate with other U.N. bodies.

The U.N. Human Rights Council condemned Israel´s planned construction of new housing units for Jewish settlers in the West Bank and East Jerusalem, saying they undermined the peace process and posed a threat to the two-state solution and the creation of a contiguous and independent Palestinian state.

About 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem, areas Israel captured in a 1967 war. Palestinians want the territory for an independent state along with the Hamas-controlled Gaza Strip.

Palestinians say settlements, considered illegal by the International Court of Justice, the highest U.N. legal body for disputes, would deny them a viable state.

Israel cites historical and Biblical links to the West Bank and says the status of settlements should be decided in peace negotiations. (© Thomson Reuters 2012. 03/26/12)