US officials on Tuesday decried Israel's approval of 1,100 new housing units Jerusalem's Gilo neighborhood saying the move was "deeply disappointing" and "counterproductive."
President Barack Obama has repeatedly called for Israel to halt building ahead of direct talks between Israeli and Palestinian Authority officials saying it "isn't necessary for Israel's security."
But Israeli officials, who froze construction in the so-called 'disputed territories' for ten months in a failed bid to bring PA officials to the table see little point in additional freezes.
Top EU diplomat, Baroness Katherine Ashton, said the Quartet had called for parties "to refrain from provocative actions".
"It is with deep regret that I learned today about the decision to advance in the plans for settlement expansion in east Jerusalem," she said in a statement.
"This plan should be reversed. Settlement activity threatens the viability of an agreed two-state solution and runs contrary to the Israeli-stated commitment to resume negotiations."
But Israeli construction does not run counter to Prime Minister Binyamin Netanyahu's commitment to "direct negotiations without preconditions."
On Tuesday Netanyahu said officials in Ramallah had "cherry-picked" a key final status issue to use as a precondition to forestall talks.
Criticism of Israeli construction projects in 'disputed territories’ has become de rigueur fashion for US and EU diplomats in recent years.
Commensurate criticism of PA construction in 'disputed territories' by the US and EU, however, has not been forthcoming.