GENEVA, July 9 (Reuters) - Israeli settlements in east Jerusalem and the occupied West Bank amount to a war crime, a U.N. human rights investigator said on Friday, calling on countries to inflict a cost on Israel for its "illegal occupation". Michael Lynk, U.N. special rapporteur on human rights in the occupied Palestinian territory, was addressing a session of the U.N. Human Rights Council, boycotted by Israel which does not recognise his mandate or cooperate with him. "Inmy report, I conclude that the Israeli settlements do amount to a war crime," Lynk said. He said the settlements violate an absolute ban on an occupying power transferring part of its civilian population into an occupied territory, thereby meeting the definition of a war crime under the Rome Statute founding the International Criminal Court (ICC). "I submit to you that this finding compels the international community ... to make it clear to Israel that its illegal occupation, and its defiance of international law and international opinion, can and will no longer be cost-free," Lynk told the Geneva rights forum. Many countries consider the settlements a breach of international law. Israel disputes this and cites Biblical and historical connections to the land, as well as security needs. Israel"s mission to the U.N. in Geneva, in a statement to Reuters, rejected Lynk"s report as "the latest one-sided and biased report against Israel" and accused him of turning a blind eye to violations committed by the Palestinian Authority and Gaza rulers Hamas. DEMOLITION Lynk said Israel"s demolition of Bedouin tent dwellings in a village in the West Bank on Wednesday left residents without food or water in the heat of the Jordan Valley, calling it "both unlawful and heartless". "Progressive seizure of Palestinian lands together with the protection of the settlements is a further consolidation of Israel"s de facto annexation of the West Bank," he said. There are nearly 300 settlements in East Jerusalem and the West Bank, with more than 680,000 Israeli settlers, Lynk said. The United States, Israel"s closest ally which has observer status at the council, did not speak at the council which it accuses of having an anti-Israel bias. Lotte Knudsen, the European Union"s ambassador to the United Nations in Geneva, said the settlements were illegal under international law. "Such actions as forced transfers, evictions, demolitions, and confiscation of homes will only escalate an already tense environment." Palestinians want to establish an independent state in the West Bank and Gaza with East Jerusalem as its capital, but the issue of Jewish settlements on land captured by Israel in a 1967 war has long been a stumbling block in the peace process. The last round of peace talks collapsed in 2014.