Egypt on Monday denounced Israel’s plans to declare 4,000 dunams (988 acres) of land in Judea, mostly in Gush Etzion, as state land, AFP reported.
Cairo said the move violates international law and is an obstacle to efforts for a lasting Palestinian-Israeli peace agreement.
"This is not a positive step - it contradicts international law and will have negative consequences on the peace process," a Foreign Ministry statement in Cairo said, according to AFP.
Egypt last week mediated a permanent truce between Israel and the Hamas rulers of Gaza to end 50 days of fighting.
Negotiators are expected to return to Cairo within a month to discuss issues such as Hamas' demands for a port and an airport and the release of prisoners, as well as Israel's call for Gaza to be demilitarized.
The foreign ministry in Cairo did not mention the Gaza truce talks but insisted that Israel's designation of area in Judea as state land would be "an obstacle" to a two-state solution between Israel and the Palestinian Authority.
Sunday’s decision, opens the possibility of further construction in the region, is one of Israel's responses to the kidnapping and murder of Israeli teens Eyal Yifrah, Naftali Frenkel, and Gilad Sha'ar. The three were kidnapped in Gush Etzion and their bodies were found several weeks later in a field near Hevron.
Palestinian Authority Chairman Mahmoud Abbas issued a condemnation of Israel’s decision, with his spokesman Nabil Abu-Rudeineh saying that the decision would “bring about a further deterioration” in peace talks between Israel and the Palestinian Authority.
“The settlement enterprise is illegal,” he declared.
On Monday, United Nations Secretary General Ban Ki-moon condemned the decision as well, saying he is "alarmed" by it.