The UN's special coordinator for the Middle East peace process on Wednesday accused a key ally of Israeli Prime Minister Benjamin Netanyahu of "killing hope" for a settlement.

Nickolay Mladenov spoke after Justice Minister Ayelet Shaked (Jewish Home) declared the party would never support a two-state solution.

"The determination of some ministers in Israel to block progress and kill hope by promoting illegal settlements and rejecting a Palestinian state is concerning," he said in a statement to AFP.