Israel has condemned a video by a group of settlers that depicts the European Union's ambassador to Israel Lars Faaborg-Andersen wearing a Hannibal Lecter mask and accuses him of trying to establish a "terror state".

The video showing Lars Faaborg-Andersen as the psychopathic cannibal from the film "The Silence of the Lambs" was posted on Facebook by settler group "Jerusalem Periphery Forum" and said "Andersen must be restrained".

Israel's foreign ministry spokesperson, Emmanuel Nahshon, said in a statement: ‘’The director general of the Ministry of Foreign Affairs Dore Gold condemns the disrespectful treatment of the European Union ambassador."

Jerusalem Periphery Forum advocates the ending of European housing aid to Palestinian and Bedouin encampments along Highway 1 between the settlement of Maale Adumim, north of Jerusalem, and the Dead Sea.

Israel considers such EU-funded construction illegal.

"Lars Faaborg-Andersen undermines Israeli sovereignty and ignores Israeli law. He is behind the illegal construction near Highway 1 in order to create facts on the ground, territorial continuity for a future terrorist state," the video said.

A spokesperson for the European Union in Israel declined to comment on the video.