Friedman is also considered far-right on issues, including settlement building and has advocated for the annexation of the West Bank, which Israel captured from Jordan in the 1967 war.
The Obama administration has been highly critical of Israeli settlement construction in the occupied West Bank and East Jerusalem. Most countries view all Israeli settlements on occupied land that the Palestinians seek for their own state as illegal.
The Palestinians, who want to establish a state in the West Bank and Gaza Strip, with East Jerusalem as its capital, say settlements are a fundamental obstacle to peace. The last U.S.-backed talks on statehood collapsed in 2014.
J Street, a liberal pro-Israel group based in Washington, said it was "vehemently opposed" to Friedman's nomination.
"This nomination is reckless, putting America's reputation in the region and credibility around the world at risk," the statement said.
The Zionist Organization for America, a conservative Jewish-American pro-Israel group welcomed the nomination, saying he had "the potential to be the greatest U.S. ambassador to Israel ever."