In a statement issued two weeks before Israeli Prime Minister Benjamin Netanyahu is due to visit US President Donald Trump, the White House said the administration "has not taken an official position on settlement activity."
Trump, a Republican, has signaled he could be more accommodating toward settlement projects than his Democratic predecessor, Barack Obama. The latest statement reflects slightly more nuanced language on how the new administration views settlement activity.
"While we don't believe the existence of settlements is an impediment to peace, the construction of new settlements or the expansion of existing settlements beyond their current borders may not be helpful in achieving that goal," the White House said in a statement.
The statement could disappoint Israel's far-right, which had hoped Trump would give an unqualified green light on rapid settlement construction in the West Bank and eastern Jerusalem—areas Israel captured in the 1967 Six-Day War.
US Secretary of State Rex Tillerson spoke by phone with Netanyahu on Thursday, the State Department said. It did not say whether they discussed the White House statement.
Obama routinely criticized settlement construction plans and his administration often described settlement activity as lacking legitimacy and impeding peace.
The White House statement came as Israel has ratcheted up settlement activity. On Wednesday, it said it would establish a new settlement, the first since the late 1990s. It also announced plans for the construction of 3,000 more homes in the West Bank, the third such declaration in less than two weeks since Trump took office.
An announcement a week ago by Israel that it would build some 2,500 more dwellings in the West Bank, drew rebukes from the Palestinians and the European Union.
Israel's ambassador to the United Nations said on Friday it was too early to tell how the White House's latest statement on Israel's recent drive to build new homes in the West Bank would affect future building.
It was a first reaction by an Israeli official to the statement in Washington.
"It's still too early to tell ... I would not categorize this as a U-turn by the US administration but the issue is clearly on their agenda ... the issue will be discussed when the prime minister (Benjamin Netanyahu) meets the president in Washington," Israel's UN ambassador, Danny Danon told Israel Radio.
"We will not always agree on everything."
The group representing Israeli settlers brushed off the White House statement.
The Yesha council said Friday it looks forward to working with the Trump administration. Oded Revivi, the chief foreign envoy of the Yesha council, said his group "thanks the White House for asserting that our communities were never an impediment to peace," adding that "nothing is more natural and morally just than Jews building in Judea."
"We look forward to working closely with our friends in the new Trump administration to build a brighter future all," he added.
Deputy Foreign Minister Tzipi Hotovely issued a statement saying the "government was elected in order to realize the right of the people of Israel to build in all parts of the country" and that must be respected.
If the White House concedes that settlements are not an obstacle to peace, then "it must be concluded that that expanding construction is not a problem," she said.