Germany has criticized Israel for approving the construction of more than a thousand settlements in occupied West Bank, terming the move a threat to the two-state solution."The construction of settlements in occupied territories violates international law. This also hinders efforts to revive the peace process and threatens the basis of a two-state solution," German Foreign Ministry said Tuesday in a rare statement that criticized its close ally Israel.Israel reportedly approved 1,065 housing units last week on the occupied territories, according to the Israeli settlement watchdog group Peace Now.German Foreign Ministry expressed "grave concern" over the Israeli move and urged authorities to refrain from unilateral steps that could endanger peace efforts."Precisely now both sides are urgently called to build trust and refrain from unilateral and provocative actions. We warn that such steps would hamper chances for the resumption of peace negotiations," the statement said.Peace talks between Israeli and Palestinian negotiators grounded to a halt a year ago over Israel's refusal to release a group of Palestinian prisoners despite earlier pledges to do so.Last year in the summer, Israel launched a weeks-long offensive on the Gaza Strip, with the stated aim of staunching rocket fire from the blockaded coastal enclave, which killed over 2,160 Palestinians and injured 11,000.Israeli Prime Minister Benjamin Netanyahu has formed a new coalition government with right-wing and ultra orthodox parties in May, after his Likud party fell short of winning majority in Knesset polls held in mid-March. Netanyahu's coalition partner Jewish Home party advocates new settlements in occupied territories.