EU foreign affairs chief Catherine Ashton sought to maintain pressure on Israel Wednesday after the Jewish state's latest approval for settlement expansion inside the occupied West Bank.
"I deeply regret the announcement indicating that over 200 building permits were granted on Monday for housing units to be located in the West Bank settlement of Ariel," Ashton said in a statement.
"Parties must do their utmost to avoid acts on the ground which undermine confidence.
"It is in their interest not to derail current efforts to resume direct negotiations," she said, reiterating that "all settlement activities are illegal under international law and threaten the viability of an agreed two-state solution."
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Israel on Monday approved the building of 277 new homes in Ariel, taking the total to more than 2,700 new settler homes approved in the past two weeks.
The planned expansion has brought a furious response from the Palestinian Authority, which has shunned direct talks since Israel ended a moratorium on settlement building in September last year.
Israel has rejected persistent international criticism, insisting that the settlements are not an obstacle to direct talks.
The two sides are building up to a new diplomatic confrontation as Palestinian president Mahmud Abbas prepares to seek full United Nations membership at the UN General Assembly in September.
Israel says this is a threat to the peace process and the United States is expected to veto any application to the UN Security Council.