The deadly H5N1 strain of bird flu virus has been found in poultry in a Jewish settlement the West Bank, the Israeli agriculture ministry has said.
Bird flu has also been found in Egypt and the Gaza Strip
Initial tests found dozens of birds had died of the virus on Wednesday in the Bekaot settlement in the Jordan Valley.
A 10km (six-mile) quarantine has been imposed around the farm and veterinary officials have begun to cull poultry.
Last week, thousands of birds died of the virus in two Israeli farms in the western Negev, near the Gaza Strip.
Bird flu was also found on Wednesday in the southern Gaza town of Rafah, on the border with Egypt.
Acting Israeli Prime Minister Ehud Olmert has instructed Israeli officials to offer the Palestinian Authority assistance in order to prevent the spread of the virus in Palestinian areas.
On Tuesday, neighbouring Egypt reported its fourth suspected case of bird flu in humans. Earlier this month, Egyptian state TV said a woman had died from the H5N1 virus.
The H5N1 strain of the virus has killed more than 100 people worldwide.
It does not pose a large-scale threat to humans, as it cannot pass easily from one person to another.
However, experts fear the virus could mutate to gain this ability, and in its new form trigger a flu pandemic, potentially putting millions of human lives at risk.