Civil rights groups went to the supreme court on Sunday to challenge a law banning Israelis from calling for a boycott of Jewish settlements in the occupied West Bank.

Under the 2011 law calling for a boycott is not a criminal offence, but a civil wrong, that could trigger lawsuits demanding compensation.

Israelis are thus discouraged from opposing the settlements.

An alliance of the groups told the supreme court that the law infringes their right to free speech.

The appeal comes against a backdrop of an increasingly successful international boycott campaign against Israel's settlement policies in the occupied Palestinian territories.

In recent years, settlement opponents in Israel have joined broader boycotts of products made there.

Association for Civil Rights in Israel leader Haggai El-Ad insists that a boycott is a legitimate form of protest and that the Israeli law is clearly politically motivated since it is only applied to those targeting the settlements.

But Deputy Foreign Minister Zeev Elkin, who initiated the Bill, claims that the aim of the legislation was to prevent discrimination against people based on where they live.

The issues of settlements and the boycott threat against them have figured prominently in recently restarted US-mediated peace talks and Prime Minister Benjamin Netanyahu has set boycotters in his sights.

More than 550,000 Israeli settlers now live among roughly 2.5 million Palestinians in the West Bank and East Jerusalem, contiguous areas occupied by Israel in the 1967 war.

A ruling from the court may take months.