The sanctions came alongside a warning against funneling money to nonprofits that promote violence.
Last week, French authorities banned 28 Israeli settlers from entering the country, accusing them of attacking Palestinians in the occupied West Bank.
US President Joe Biden and Jordan's King Abdullah spoke about the importance of a two-state resolution to the conflict when they met at the White House earlier this week.
The sanctions were considered amid exacerbated tensions between the US and Israel due to Washington's insistence that Israel refrain from carrying out a full-fledged invasion of Rafah.
The UK Foreign Secretary's office says these four Israelis threatened human rights in the West Bank.
The US sanctions against four Israeli West Bank settlers are especially far reaching and are typically reserved for terrorists.
Drawing equivalency between Settlers and Hamas will only embolden Palestinian terrorists to continue their campaign to eliminate Israel
According to the State Department, Levi led a group of settlers who created an atmosphere of fear in the West Bank.
Canadian Prime Minister Justin Trudeau on Friday said he was considering imposing sanctions on "extremist" settlers in the West Bank.
"There is no justification for extremist violence against civilians, whatever their national origin, ethnicity, or religion."
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