Finance Minister Yair Lapid warned Tuesday that Israel was eroding its international support, as criticism abroad mounted of its biggest grab of Palestinian land since the 1980s.
Lapid complained the security cabinet had not been consulted about Sunday's announcement of the confiscation of 400 hectares (988 acres) of land in the occupied West Bank to pave the way for further settlement building.
"The announcement, which wasn't brought to the security cabinet, regarding 900 acres of land for building in Gush Etzion (between Jerusalem and Hebron) harms the State of Israel," Lapid told an economic conference in Tel Aviv.
"Maintaining the support of the world was already challenging, so why was it so urgent to create another crisis with the United States and the world?" he asked.
Lapid, a centrist within the governing coalition, was alluding to widespread international condemnation of the high Palestinian civilian death toll during Israel's 50-day war in Gaza.
However, Foreign Minister Avigdor Lieberman, himself a resident of Tekoa in the Gush Etzion settlement zone, defended the expropriation.
"The official policy of the government of Israel is first of all to focus on those settlement blocs which it is understood will under any agreement to come remain under Israeli sovereignty," he said in remarks broadcast by public radio.
"I think that Gush Etzion expresses the broadest consensus in Israeli society and it is understood by everyone that in any agreement Gush Etzion will be part of the state of Israel."
But Justice Minister Tzipi Livni, a cabinet moderate who served as chief negotiator in abortive US-brokered talks with the Palestinians, slammed the land grab.
"It weakens Israel and threatens its security," she said.
On the other side, Economy Minister Naftali Bennett, whose far-right Jewish Home party draws much of its support from the settler lobby, defended the move as retaliation for the murder of three Israeli teenagers in the West Bank.
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"It's 120 years that the world has opposed our construction, and we'll continue to do it," he said, equating settlement building in the West Bank with construction in the years before Israel's creation in 1948.
The European Union on Monday condemned the Israeli move.
"We condemn the new appropriation of land in the West Bank, relating to plans for further settlement expansion, announced by the Israeli government on Sunday," it said in a statement distributed by EU missions in Tel Aviv and occupied east Jerusalem.
"At this delicate moment, any action that might undermine stability and the prospect of constructive negotiations following the ceasefire in Gaza should be avoided," it said.
- Strong US, UN criticism -
The international community regards all Israeli settlements in the West Bank, including annexed east Jerusalem, as illegal, and Sunday's announcement drew strong US and UN criticism.
"This announcement, like every other settlement announcement Israel makes, planning step they approve, and construction tender they issue, is counterproductive to Israel's stated goal of a negotiated two-state solution with the Palestinians," a US State Department official said.
"We urge the government of Israel to reverse this decision."
UN Secretary General Ban Ki-moon was "alarmed" by Israel's plans, his spokesman said.
"The seizure of such a large swathe of land risks paving the way for further settlement activity, which -– as the United Nations has reiterated on many occasions -– is illegal under international law and runs totally counter to the pursuit of a two-state solution," the spokesman said.