The European Union on Friday condemned an Israeli plan to build 2,610 new settler homes in annexed east Jerusalem, calling it "highly detrimental" to diplomatic efforts for Israeli-Palestinian peace.
Brussels called on Israel to "urgently reverse" actions leading to settlement expansion in east Jerusalem, which the Palestinians hope to make the capital of a future state alongside Israel.
"This represents a further highly detrimental step that undermines prospects for a two-state solution and calls into question Israel’s commitment to a peaceful negotiated settlement with the Palestinians," the EU's diplomatic service said.
The housing units, which have been slated for construction since 2012 in the neighbourhood of Givat Hamatos, were given final approval last week, according to the Peace Now watchdog.
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The project has also drawn sharp criticism from the United States, with President Barack Obama on Wednesday telling Israeli Prime Minister Benjamin Netanyahu of Washington's deep concern over the proposed development, and from France.
The EU also accused Israel of allowing further settlement expansion in the east Jerusalem neighbourhood of Silwan.
The 28-country bloc also called on Israel to end decades of settlement building in east Jerusalem and the West Bank, land which Israel seized in the 1967 war with the Arabs and on which the Palestinian want to build a future state.
Israel's settlement building in the occupied West Bank and annexed east Jerusalem, which is illegal under international law, has caused the breakdown of several rounds of peace talks supported by the United States, the European Union, Russia and the United Nations.
The bloc said future EU-Israel relations depended on how well the Jewish state pursued a lasting peace based on a two-state solution.