UN chief Ban Ki-moon urged Israel and the Palestinians on Tuesday to move away from unilateral actions stoking tensions and make the "tough compromises" needed to end their decades-old conflict.
Ban spoke to the UN Security Council after returning from a visit to the Middle East where he saw first-hand the destruction in Gaza wrought by the 50-day war between Israel and Hamas militants.
"Leaders on both sides must overcome their differences and dispense with the unilateral initiatives that serve only to fuel mistrust and polarization," the secretary general said.
The appeal came after Palestinian youths attacked an apartment building taken over by Jewish settlers in east Jerusalem and as the Palestinians pushed for a divisive UN resolution on ending the Israeli occupation in 2016.
UN diplomats say the draft resolution stands no chance of being adopted, but they appear at a loss to point a way forward to revive Israeli-Palestinian peace talks.
Describing the two-state solution as the "only viable option" for peace, Ban said: "It is time for courage and vision to make the tough compromises that are needed now. I challenge both sides to rise to the occasion."
Illegal Israeli settlements
The UN chief called on Israel to reverse settlement activity which he emphasized were "illegal" and expressed concern over clashes sparked by Jewish visits at holy sites in Jerusalem.
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"International law is clear: settlement activity is illegal. It runs totally counter to the pursuit of a two-state solution," he said.
Israeli police have vowed to restore order following clashes between Palestinian youths over recent Jewish visits to the Al-Aqsa mosque, Islam's third holiest site.
In his address to the council, Palestinian envoy Riyad Mansour said the "time is past due to acknowledge that Israel, the occupying power, rejects peace and is deliberately destroying the two-state solution."
Mansour appealed to the 15-nation council to support the draft resolution on setting 2016 as the date for an Israeli withdrawal from the West Bank and Gaza, and to set a course for Palestinian statehood.
He invited the council ambassadors to visit Gaza, as Ban did last week, and emphasized the "centrality" of the United Nations in the search for peace after US efforts to re-start peace talks failed.
Israeli Deputy Ambassador David Roet took a swipe at European countries that have moved toward recognition of Palestinian statehood, saying such actions would not advance peace.
"By prematurely recognizing a state of Palestine, European governments are sending a message that Palestinians do not need to make hard choices and they are undermining efforts to bring about a real and lasting change in our region," he said.
Gaza ceasefire talks are due to resume next week in Cairo to address Palestinian calls for ending the Israeli blockade and Israeli demands for disarming Hamas.