By Simon Lewis and Daphne Psaledakis
WASHINGTON (Reuters) -The Biden administration imposed sanctions on two Israeli outposts and three settlers it accused of undermining stability in the occupied West Bank on Thursday, and appealed to Israel to do more to prevent settler violence that Washington says is an obstacle to Israeli-Palestinian peace.
The State Department said the outposts known as Moshe's Farm and Zvi's Farm had been bases for violence against Palestinians.
The administration in February imposed sanctions on four Israeli men it accused of being involved in settler violence in the West Bank, signalling growing U.S. displeasure with the policies of Israeli Prime Minister Benjamin Netanyahu.
While voicing growing frustration with the Palestinian civilian toll from Israel's war against Hamas, Washington has repeatedly asked Israel to hold violent settlers accountable and complained that its actions allowing settlement expansion diminish hopes for a two-state solution.
State Department spokesperson Matthew Miller said the United States would go on taking action against those engaging in what he called extremist violence and threatening peace and security in the West Bank.
"It is critical that Israel take additional action to stop settler violence and hold accountable those responsible for it, not just for the sake of the victims of this violence, but for Israel's own security and standing in the world," Miller said in a press briefing.
The sanctions typically freeze any U.S. assets of those targeted and generally bar Americans from dealing with them, but it was not immediately clear how they would affect the outposts.
Israeli banks said in February they were heeding the sanctions, despite Israeli government opposition, and the targeted settlers reported their bank accounts had been frozen.
Israeli Finance Minister Bezalel Smotrich, who lives in a West Bank settlement, said on Thursday the sanctions were part of a "campaign designed to tarnish the entire State of Israel and lead to the dismantling of the settlement enterprise and the establishment of a Palestinian terrorist state."
Washington has also said it will issue visa bans against settlers it deems extremist.
The administration said last month that Israeli settlements in the West Bank were inconsistent with international law, signalling a return to a longstanding U.S. policy that had been reversed by the previous administration of Donald Trump.
Since the 1967 Middle East war, Israel has occupied the West Bank of the Jordan River, which Palestinians want as the core of a future independent state. Israel has built Jewish settlements, many of which began as unauthorized outposts.
Israel disputes this and cites historical and biblical ties to the land.
Thursday's sanctions targeted Moshe Sharvit, who has "harassed, threatened, and attacked" Palestinian civilians near the Moshe's Farm outpost, of which he is the founder and owner, the State Department said.
Also targeted were Zvi Bar Yosef, founder of Zvi's Farm, and Neriya Ben Pazi, who has expelled Palestinian shepherds from hundreds of acres of land, it said.
Reuters was unable immediately to reach the three for comment.