Four European countries have summoned their Israeli ambassadors over its latest settlement construction push, deepening the rift between the Jewish state and allies.

Although Europe considers all Israeli settlement construction illegal, the summoning of ambassadors in France, Britain, Sweden and Spain to accuse Israel of undermining already troubled peace efforts was an unusually strong expression of displeasure. It came as Israel was already annoyed over Europe's failure to back the Jewish state in its campaign against Palestinian UN statehood.

There was fury over Israel's announcement on Friday that it would move ahead on plans to build 3,000 settler homes in territories Israel captured in 1967 to punish the Palestinians for winning UN recognition of a state of Palestine.

Israel also said it would begin planning work on an especially sensitive piece of land outside Jerusalem that it has refrained from developing because of US pressure.

After a flurry of angry phone calls from European capitals to Israel over the weekend, France summoned the Israeli envoy to Paris. France, the first major European country to announce support for the Palestinian statehood effort, wrote to the Israeli government, calling the settlement decision "a considerable obstacle to the two-state solution."

Britain, which abstained in the UN vote, urged Israel to reverse the decision as it summoned Israeli ambassador Daniel Taub to the Foreign Office. Swedish Foreign Minister Carl Bildt told parliament that "together with other EU countries we will discuss other potential steps," but he would not elaborate.

British officials said London was looking to Washington to take the lead.

None of the four European governments openly threatened any concrete measures to punish Israel.

Senior Palestinian official Nabil Shaath praised the Europeans for taking action.

"We've been expecting this kind of behaviour for a long time," he said. "For this to come from France and England is very beneficial to us. We highly appreciate it and we are hoping the US will follow their lead."

Germany, which abstained in the UN vote, expressed concern over the Israeli move but would not say whether it had taken any direct measures in response. Israeli Prime Minister Benjamin Netanyahu is due in Berlin on Wednesday for a previously scheduled meeting with Chancellor Angela Merkel.

The growth of settlements, now home to half a million Israelis, is at the heart of the four-year breakdown in negotiations.

The Palestinians view continued settlement expansion as a show of bad faith and refuse to return to talks unless construction is frozen.

Following his talks with the ambassador, Mr Burt said: "I set out the depth of the UK's concern about these decisions and I called on the Israeli government to reverse them.

"The settlements plan in particular has the potential to alter the situation on the ground on a scale that threatens the viability of a two state solution.