A ministerial committee which oversees legislation voted in favor of the controversial bill on Sunday.
The bill, sponsored by the Yisrael Beitenu party in Prime Minister Benjamin Netanyahu's governing coalition, would subject anyone caught filming or publishing footage "with intent to harm the morale of Israel's soldiers or its inhabitants" to up to five years in prison.
It would give 10 years in jail to those intending to damage Israel's "national security", Presstv Reported.
The parliament will probably vote the bill this week. If passed, it will be scrutinized and amended before three more parliamentary votes needed for it to pass into law.
In recent months, Israeli troops have on numerous occasions been caught on camera brutally killing Palestinians, with the videos going viral online and sparking condemnations of the regime’s military.
A video circulated online in April showed the moment an Israeli sniper shoots an unarmed Palestinian protester near the border fence in the besieged enclave. The sniper and the other soldiers are heard rejoicing following the “successful” shooting.
An Israeli human rights organization also in August 2017 captured a video showing Israeli settlers verbally abusing Palestinians and swearing at the holy religion of Islam as well as Prophet Muhammad (PBUH) in the presence of regime forces.
The B’Tselem video shows the Israelis from the settlement of Kiryat Arba using obscene language through a loudspeaker against a Palestinian woman, who is a local volunteer for the group, and is filming the incident from her window.
In March 2016, Israeli Sergeant Elor Azaria shot dead a Palestinian who was lying immobile on the ground, following an alleged stabbing attack in the West Bank city of al-Khalil (Hebron).
Azaria was found guilty of manslaughter and given 18 months in prison. However, he was released earlier this month after serving only two-thirds of his sentence.
Yisrael Beitenu leader and Minister of Military Affairs, Avigdor Lieberman, said: "Israeli soldiers are under constant attack by Israel haters and supporters of terrorism who look constantly to degrade and sully them. We will put an end to this."
However, Deputy Palestinian Information Minister Fayez Abu Aitta condemned the move and told Reuters, "This decision aims to cover up crimes committed by Israeli soldiers against our people, and to free their hands to commit more crimes."
The phrasing of the bill stops short of a blanket ban, aiming instead at "anti-Israeli and pro-Palestinian organizations" which spend "entire days near Israeli soldiers waiting breathlessly for actions that can be documented in a slanted and one-sided way so that soldiers can be smeared."
The bill claims that B'Tselem and several other rights groups are supported by organizations and governments with "a clear anti-Israel agenda" and that the videos aim to damage Israel and its national security.
The ban would cover social networks as well as traditional media.
B'Tselem spokesman Amit Gilutz shrugged off the bill and said, "If the occupation embarrasses the government, then the government should take action to end it."
"Documenting the reality of the occupation will continue regardless of such ridiculous legislation efforts," he pointed out.
Palestinian journalists in May condemned the draft law, entitled “Prohibition against photographing and documenting IDF soldiers.”
The Palestinian Journalist Syndicate (PCJ) said in a statement that the “racist” bill “severely attacks the profession of the press and legitimizes the criminal practices committed by the Israeli occupation army against the Palestinian people.”