Israeli lawmakers approved jailing children as young as 12 convicted of "terrorist offences" in the wake of recent clashes between Palestinians and Israeli army, parliament said on Wednesday.

"The 'Youth Bill,' which will allow the authorities to imprison a minor convicted of serious crimes such as murder, attempted murder or manslaughter even if he or she is under the age of 14, passed its second and third readings... Tuesday night," an English-language statement said.

It added that the seriousness of attacks in recent months "demands a more aggressive approach, including toward minors."

The statement quoted Anat Berko, a lawmaker from Prime Minister Benjamin Netanyahu's right-wing Likud party and the bill's sponsor, as saying "to those who are murdered with a knife in the heart it does not matter if the child is 12 or 15."

During the recent clashes, Israeli forces killed at least 218 Palestinians, while 34 Israelis were killed in attacks by Palestinians.

Many of the assailants were young people, including teenagers. Other youths have been shot dead during protests and clashes with security forces.

Israeli justice minister Ayelet Shaked gave the bill full backing when it came before a ministerial committee last year.

Israeli rights group B'Tselem criticised the bill and Israel's treatment of Palestinian youths.

"Rather than sending them to prison, Israel would be better off sending them to school where they could grow up in dignity and freedom not under occupation," it said in a statement Wednesday.

"Imprisoning such young minors denies them the chance of a better future."

Military law, applied to Palestinian residents of the Israeli-occupied West Bank, already allows imprisonment of 12-year-olds.

A 12-year-old Palestinian girl from the West Bank, convicted of attempted murder by a military court as part of a plea bargain and sentenced to four months, was released from prison in April.