The United Nations and UN Security Council powers condemned Israel's heightened settler construction in the Palestinian territories as a threat to flagging peace efforts.
UN leader Ban Ki-moon and the UN envoys from several European Union countries, Russia and China on Wednesday warned Israel against building thousands of new settler homes approved in recent weeks.
US ambassador Susan Rice did not join their public attack on Israel, but slammed the "provocative" act of the United States' major ally during closed UN Security Council consultations.
Israel has approved thousands of new homes in the West Bank and occupied East Jerusalem since the UN General Assembly voted on November 29 to recognize Palestine as a non-member state.
Israel gave the green light to plans for 2,610 homes in East Jerusalem and tenders for 1,048 units in the West Bank just before the UN meeting.
UN secretary general Ban said the Israel-Palestinian peace process was in "deep freeze," worsened by the settlement approvals.
"I call on Israel to refrain from continuing on this dangerous path, which will undermine the prospects for a resumption of dialogue and a peaceful future for Palestinians and Israelis alike," he said.
The United Nations also called on Israel to end its freeze on transferring customs and tax payments that it collects for the cash-strapped Palestinian Authority.
UN ambassadors from Britain, France, Germany and Portugal highlighted European fears over the peace stalemate and stressed that their governments "strongly oppose" the Israeli construction.
"Israel's announcements to accelerate the construction of settlements send a negative message and are undermining faith in its willingness to negotiate," they said in a statement read by British ambassador Mark Lyall Grant.
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"The viability of the two-state solution, that is key for Israel's long-term security, is threatened by the systematic expansion of settlements," Lyall Grant added.
Russia's UN envoy Vitaly Churkin said "the situation could be defused should Israel reconsider the settlement construction plans."
Churkin called for an urgent ministerial meeting of the diplomatic Quartet on the Middle East -- the United States, European Union, Russia and United Nations -- in a bid to revive direct Israel-Palestinian talks suspended since September 2010.
Non-aligned members of the Security Council -- Azerbaijan, Colombia, India, Guatemala, Morocco, Pakistan, South Africa and Togo -- read their own statement of condemnation. China also joined the protest, before all were rebuffed by Israel.
Israel's UN ambassador Ron Prosor said the new announcements were "planning and zoning" and that it could take years before the government allows the start of construction.
Prosor questioned how a contiguous state between Gaza and the West Bank could be created without cutting Israel in two. He said settlements are "not the major hurdle to peace" and the Palestinians should return to talks without conditions.
The United States traditionally protects Israel at the Security Council. Using its power as a permanent member, it has vetoed many resolutions criticizing Israel, including over settlements.
US ambassador Rice however reaffirmed growing US impatience with its ally during closed talks at the council, diplomats said on condition of anonymity.
She said the settlements are "counterproductive" and added that the United States "is deeply disappointed that Israel insists on continuing a pattern of provocative action."
"We are urging Israeli leaders to reconsider these unilateral decisions," Rice was quoted as saying.