The European Union sees Israeli settlements in Palestinian territory as a "worrying" development and calls for the preservation of a viable two-state solution, in a draft declaration obtained by AFP Friday.
"Against the backdrop of worrying developments on the ground in 2011, particularly with regard to settlements, the EU reaffirms its commitment to a two state solution," says the text to be adopted by foreign ministers on Monday.
"The legitimacy of the State of Israel and the right of Palestinians to achieve statehood must never be called into question. The viability of the two state solution must be preserved," the draft says.
The EU also urges Israelis and Palestinians "to demonstrate their commitment to a peaceful solution" to their decades-old conflict.
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Jewish settlements are deeply contentious, with Israeli-Palestinian peace talks grinding to a halt over the issue in late September 2010, just weeks after they were restarted.
A leaked report written by EU heads of mission in Jerusalem and Ramallah accuses Israel of "systematically undermining the Palestinian presence in the city (of Jerusalem) through the continued expansion of settlements."
The future of east Jerusalem, which the Palestinians want as the capital of their promised state, is one of the most sensitive issues of the conflict.
Israel occupied east Jerusalem in 1967 and annexed it later in a move never recognised by the international community. It considers the entire city its "eternal, indivisible capital."