Hillary Clinton warns Israel on settler homes
The US has criticised Israel's decision to authorise the construction of 3,000 more housing units in occupied East Jerusalem and the West Bank.
Secretary of State Hillary Clinton said that "these activities set back the cause of a negotiated peace".
The White House had earlier described the proposal as "counter-productive".
The Israeli decision followed a UN General Assembly vote to upgrade the Palestinians' status to non-member observer state.
Thursday's UN motion was carried by 138 votes to nine with 41 abstentions.
Israel and the US voted against the proposal.'Political theatre'
Addressing a Washington audience that included Israel's Defence Minister Ehud Barak and Foreign Minister Avigdor Lieberman, Mrs Clinton said the vote "should give all of us pause. All sides need to consider carefully the path ahead".
The Palestinians had to be persuaded, she said, that negotiations with Israel were the only path to an independent state.
It was in Israel's interest, she added, to make generous steps towards Palestinians in the West Bank as a bulwark for Israeli security, "whether or not there is a comprehensive agreement in the near future".
A first indication of Israeli anger came less than 24 hours after the vote was taken at the UN. A senior Israeli official confirmed the government is approving the construction of 3,000 new homes in settlements”
UK Foreign Secretary William Hague said he was "extremely concerned" at the move, adding that the UK "strongly advises the Israeli government to reverse this decision".
Mrs Clinton was having talks late on Friday with both Israeli ministers who were attending the Washington forum as well as Palestinian Prime Minister Salam Fayyad.
The US voted against the Palestinian Authority president's UN motion, agreeing with Israel that it would make a return to peace talks harder.
Israeli government spokesman Mark Regev said the UN vote was "negative political theatre" that would "hurt peace".
An Israeli official, speaking on condition of anonymity, said some of the new units would be built between Jerusalem and the settlement of Maaleh Adumim.
Plans to build settlements in the area, known as E1, are strongly opposed by Palestinians, who say the development will cut the West Bank in two, preventing the creation of a contiguous Palestinian state.
About 500,000 Jews live in more than 100 settlements built since the occupation of the West Bank and East Jerusalem. The settlements are considered illegal under international law, though Israel disputes this.
Israel's former Foreign Minister Tzipi Livni, who has launched her own political party ahead of January elections, said the decision to build thousands more housing units "as punishment to the Palestinians only punishes Israel".Proximity talks
After Thursday's vote, the Palestinians can now take part in UN debates and potentially join bodies like the International Criminal Court (ICC).
Palestinian President Mahmoud Abbas said it was the "last chance to save the two-state solution" with Israel.
Two decades of on-off negotiations between Israel and the Palestinian Authority (PA) in the West Bank have failed to produce a permanent settlement, with the latest round of direct negotiations breaking down in 2010.
In January, several months of indirect "proximity talks" ended without any progress.
Palestinian negotiators insist that the building of Jewish settlements on occupied land must stop before they agree to resume direct talks.
Their Israeli counterparts say there can be no preconditions.