Britain and France are coordinating unprecedented diplomatic protests of Israel’s planned settlement expansion in the wake of the Palestinians’ U.N. statehood bid.

In retaliation for Palestine attaining non-member state observer status at the U.N. on Thursday, Israel announced that it would retaliate by building 3,000 new units in a West Bank area, E-1, long considered a red line by Europe and the U.S.

As German and Dutch officials warned that they may pull diplomatic support for Israel over the settlement expansion plans, Britain and France prepared to potentially recall their ambassadors:

Britain and France are poised to take action − possibly including the unprecedented step of recalling their ambassadors, according to senior European diplomats − in protest at Prime Minister Benjamin Netanyahu’s decision to move settlement construction ahead in the area known as E1, between Ma’aleh Adumim and Jerusalem. “This time it won’t just be a condemnation, there will be real action taken against Israel,” a senior European diplomat said. Netanyahu’s decision Friday to move ahead on construction in E1 and to build 3,000 housing units in the settlement blocs east of Jerusalem, has apparently shocked the foreign ministries and the leaders in London and Paris. Not only do Britain and France view construction in E1 as a “red line,” they are reportedly angry because they view Israel as having responded ungratefully to the support the two countries gave it during the recent Gaza operation.

Israeli officials on Thursday admitted they had “lost Europe” after the Czech Republic was the only E.U. country to vote no on Palestine becoming a non-member state at the U.N. Now, Israel is testing Washington’s resolve by building in a sensitive West Bank area it had explicitly promised the U.S. it would not touch.

Today, an Israeli official called that agreement with the U.S. “no longer relevant.” However, prominent (past) U.S. officials disagreed:

“Building in E-1 has been a red line for the United States, and for a reason-it would lead to the bifurcation of the West Bank and render territorial contiguity there nearly impossible,” former senior State Department official Robert Danin told Al-Monitor Sunday, noting that he spent over 20 years working Middle East issues for the State Department under both Republican and Democratic administrations. “I don’t see any administration acquiescing to building there.” “If the announcement is real and not simply a PR move for internal politics reasons, it should spur the Administration into action, as the United States has been adamant for many years, including in the Bush Administration, that Israel not build in E-1,” former US Ambassador to Israel Kurtzer told Al-Monitor Friday.

While the Obama administration has sharply condemned Israel’s announcement, no further diplomatic steps have been taken.

However, as diplomatic pressure from Europe mounts in unprecedented ways, making the U.S. increasingly isolated in its approach, the Obama administration may be compelled to consider a shift, particularly given that Israel is responding to such pressure from the West with increased stubbornness:

Despite the protests from Europe, a source in the Prime Minister’s Office said that Israel is planning to take more steps against the Palestinian Authority. “The Palestinians will soon come to understand that they made a mistake when they took unilateral action and breached their treaties with Israel.

As Israel continues to back itself into a corner, losing the “quality minority” of Western nations it once had, many wonder how far Europe will go in a last-ditch attempt to diplomatically save the chance for two, self-determining states.

The U.S., spurned and disrespected by Israel after being one of only nine nations to vote against Palestinian statehood at the U.N., must decide whether it can afford to perpetuate the status quo – alone.

Follow David Harris-Gershon on Twitter @David_EHG