However, current rules ban travel abroad unless for specific reasons.
The exemption also applies to those returning to Wales and Northern Ireland, but people returning to Scotland will need to self-isolate.
The DfT said the additions are due to "a decrease in risk from coronavirus in these countries".
It said the new exemptions, which come into effect at 04:00 GMT on Saturday, apply to Israel and Jerusalem in their entirety. For the occupied West Bank, only people returning from East Jerusalem would not need to quarantine. The rest of the West Bank and the Gaza Strip are not covered by the lifting of the rules.
It comes as more than two million people are to be placed under Scotland's toughest Covid lockdown restrictions from Friday.
Australia, New Zealand, Estonia, Hong Kong, Iceland, mainland Greece, Japan, Latvia, Norway, Singapore and South Korea are among the countries on the DfT list where returning travellers do not need to self-isolate.
But anyone arriving into the UK from most destinations must quarantine for 14 days.
In England, foreign travel is currently only permitted for work, education or if someone has another valid reason.
People can only travel in and out of Wales with a reasonable excuse, such as going to work or school.
In Northern Ireland, people are advised to only travel for necessary reasons and to "carefully consider" their holiday and travel options, in light of the pandemic.
In Scotland, people living in higher risk areas should avoid unnecessary travel to other places. (BBC)