A UK government-backed report has accused Israel's security forces of regularly breaching the UN Convention on the Rights of the Child (UNCRC).
A delegation of senior lawyers visited Israel and West Bank and analysed the effects of Israel's military judicial system on Palestinian children.
They found "undisputed facts" showed six UNCRC articles had been breached.
The lawyers urged Israel to address differences in the way Israeli and Palestinian children were treated.
Israeli military law is applied to Palestinian children detained by the Israeli authorities in the West Bank because it is under military occupation.
However, Israeli children - including those living in Jewish settlements on occupied land in the West Bank, which are considered illegal under international law - are subject to Israeli criminal and civilian law.
Currently, the maximum period an Israeli child can be detained without charge is 40 days. For a Palestinian child the period is 188 days.
'Spiral of injustice''
The nine British lawyers, including leading barristers, said much of the reluctance to treat Palestinian children in conformity with international norms stemmed "from a belief, which was advanced to us by a military prosecutor, that every Palestinian child is a 'potential terrorist'".
Their report, Children in Military Custody , said such a stance seemed "to be the starting point of a spiral of injustice, and one which only Israel, as the occupying power in the West Bank, can reverse".
They said "certain undisputed facts" compelled them to conclude that Israel was in breach of articles 2 (discrimination), 3 (child's best interests), 37(b) (premature resort to detention), 37(c) (non-separation from adults), 37(d) (prompt access to lawyers) and 40 (use of shackles).
Israel is a signatory to the UNCRC and the International Court of Justice ruled in 2004 that it was applicable to children living in the West Bank.
Articles 76 and 65 of the 4th Geneva Convention were also found to have been breached, according to the report, which was funded by the UK Foreign Office.
The first prohibits detainees from being transported to the country of the authority which has detained them. In this case, Palestinian children were found to have been transported from the West Bank into Israel.
The second states that any penal laws applied to prisoners in an occupied land must be translated into their own language. The lawyers said the Israeli authorities failed to translate Military Order 1676 from Hebrew into Arabic.
Israel is a party to the Geneva Conventions, and bound by its obligations. But its government argues that the international conventions relating to occupied land do not apply to the Palestinian territories because they were not under the legitimate sovereignty of any state when they were captured during the 1967 Middle East war.
The British lawyers recommended that international law be fully applied to children in the West Bank; that the best interests of the child be the first consideration of the Israeli legal, military and policing institutions; and that Israel and Palestinian children be dealt with on "an equal footing".
The Israeli embassy in London said it appreciated the delegation's efforts to "to learn about the challenges involved in dealing with minors involved in acts of militancy and violence".
"Regrettably, such activities continue to be encouraged by official Palestinian textbooks and television programmes which glorify terrorism and suicide terrorists," it told the Guardian newspaper.
"As a result under-18 year olds are frequently involved in lethal acts... with the Palestinian Authority unable or unwilling to meet its obligation to investigate and prosecute these offences, Israel has no choice but to do so itself."
Israel would study the recommendations "as part of its ongoing efforts to find the most appropriate balance between preventing violence and treating perpetrators with humanity", the embassy added.