The United Nations' Mideast envoy on Monday said he was "very concerned" by Israel's decision to advance construction in a settlement in East Jerusalem that would make it even harder to establish a contiguous Palestinian state.
The move also risks angering the incoming U.S. administration, which is opposed to settlement expansion and hopes to revive negotiations over a two-state solution.
The Israel Land Authority announced on its website Sunday that it had opened up tenders for more than 1,200 new homes in the settlement of Givat Hamatos, according to the Israeli settlement watchdog Peace Now.
"If built, it would further consolidate a ring of settlements between Jerusalem and Bethlehem in the occupied West Bank," Nickolay Mladenov, the UN envoy to the Middle East peace process, said in a statement.
"It would significantly damage prospects for a future contiguous Palestinian State and for achieving a negotiated two-state solution based on the 1967 lines, with Jerusalem as the capital of both states. Settlement construction is illegal under international law and I call on the authorities to reverse this step."
The Palestinian Authority and the European Union's foreign policy chief have also criticized the move. The Palestinians want a future state that includes East Jerusalem and the West Bank, territories captured by Israel from Jordan in the 1967 Six-Day War, and view settlements as a major obstacle to peace.
With nearly 500,000 settlers now living in the West Bank, and over 220,000 more in East Jerusalem, the Palestinians say the chances of establishing their state are quickly dwindling.
Israel has long dismissed international criticism of settlement activity, but the decision to move ahead with construction at Givat Hamatos could harm relations with President-elect Joe Biden, who has promised to take a more even-handed approach to the conflict.
Outgoing president Donald Trump has given unprecedented support to Israel, including by abandoning the decades-old U.S. position that settlements are illegitimate.
U.S. Secretary of State Mike Pompeo plans to visit a West Bank settlement later this week in a stunning departure from his predecessors, who frequently criticized settlement construction.