Israel's premier faces a European "diplomatic tsunami" over controversial settlement plans as he heads to Germany this week, but also pressure at home to hew to his tough line ahead of January elections.

On Monday, at least five European nations summoned Israeli envoys to protest the Jewish state's announcement that it would move forward with construction in one of the most sensitive tracts of West Bank land near annexed east Jerusalem.

The Israeli move, which came after the Palestinians won the rank of a non-member observer state at the United Nations last week, also drew criticism from the Jewish state's closest ally, the United States.

The diplomatic flap is expected to top Israeli Prime Minister Benjamin Netanyahu's agenda as he heads to Germany on Wednesday. Berlin stopped short of summoning Israel's envoy, but also expressed deep concern over the move and urged the Jewish state to reconsider.

In Israel, commentators expressed anxiety about the display of European anger.

"Sometimes, nightmares come true," commentator Shalom Yerushalmi wrote in the Maariv daily on Tuesday.

"The world, which granted (non-member) state status to the Palestinians a week ago is now fleeing from Israel as from a fire," he added.

"These aren't Third World counties that we're talking about, but the most important high-quality, moral and diplomatic belt for Israel."

"The Europeans have removed the kid gloves," a senior Israeli diplomat told the top-selling Yediot Aharonot newspaper, which dubbed the European response a "diplomatic tsunami".

It added that Israel's diplomatic establishment believed that Washington backed the European response.

"Israel is currently experiencing a new reality: Europe is about to exact a price tag for its behaviour in the (Palestinian) territories," commentator Shimon Shiffer wrote in the same paper.

"A senior European political figure told me last night that we were at the beginning of a new era... The countries of Europe intend to impose real sanctions on Israel."

But while the diplomatic furore has caused concern among some in Israel, others have lauded Netanyahu's tough line, which comes ahead of snap elections on January 22.

Netanyahu's backers have accused Israel's left of encouraging Europe to sanction the Jewish state, and have fiercely condemned opposition critics, including former foreign minister Tzipi Livni, who will contest the elections at the head of a new party.

"It's the Israeli left that provoked this international criticism," Environment Minister and Netanyahu confidant Gilan Erdan told Israeli public radio on Tuesday.

Livni hit back, accusing Netanyahu's government of "a campaign of provocation intended to present those who criticise the government in the defence of Israel's interests as collaborators with the enemy."

Netanyahu's government has already made clear it has no plans to back away from the 3,000 settlement units it announced after the UN vote, including in the controversial E1 site.

The premier's office said on Monday there would be "no change" to its decision, and shortly afterwards, officials confirmed that plans for 1,600 additional settlement homes in east Jerusalem's Ramat Shlomo neighbourhood were also being revived.

That position has found favour with Netanyahu's constituency.

Writing in the Israel Hayom daily, considered close to the prime minister, Dror Eidar, said the 3,000 homes were "a first and very modest step."

"The government should stick to its guns this time and show that Israel is an independent state that is not subject to external dictates," Assaf Golan added in the rightwing, pro-settler Makor Rishon daily.

"You must have a backbone to be taken seriously, you must stand up for yourself when necessary and show true strength."