EU foreign policy chief Catherine Ashton on Sunday urged Israel to annul plans to build 3,000 new settler homes in the West Bank and East Jerusalem, saying it would be "an obstacle to peace".
"The European Union has repeatedly stated that all settlement construction is illegal under international law and constitutes an obstacle to peace," Ashton said in a statement.
"I ask the government of Israel to show its commitment to the early renewal of negotiations to end the conflict and the occupation by not taking forward these plans," she added.
Israel revealed plans to build the 3,000 homes a day after the historic UN vote Thursday recognising Palestine as a non-member state of the world body.
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Ashton recalled that during last week's debate on upgrading Palestine's United Nations status she had urged both sides to resume direct negotiations without delay or preconditions and "to pursue actions which could build confidence, not undermine it."
"I am therefore extremely worried by the prospects of settlement expansion on such a scale," she said.
"The reaction of the international community to any such decision is likely also to be influenced by the extent to which such expansion may represent a strategic step undermining the prospects of a contiguous and viable Palestine with Jerusalem as the shared capital of both it and Israel.
On Saturday, Arab and Turkish foreign ministers condemned the Israeli plan.