The European Union has denounced Israeli authorities’ plans to expand settlements into occupied East Jerusalem as “an obstacle to peace.”

In a strongly-worded statement issued on Saturday, the EU said Israel’s settlement construction and expansion in the area “continues to undermine the possibility of a viable two state solution with Jerusalem as the future capital of both.” The union sees the proposed two-state approach as the “only realistic way” to reach – and maintain – peace between Israel and Palestine.

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The comments come days after Israeli officials published construction tenders to build more than 800 new units in the East Jerusalem settlements of Ramot and Pisgat Zeev. Palestinians consider East Jerusalem the capital of their future state and the area is recognised by the UN as part of the Palestinian territories.

The Israeli settlements are illegal under international law.

The EU also this week criticized Israel for dismantling schools which had been built for Palestinian children and funded by the EU. It called on Israeli authorities to rebuild the facilities at the same sites.

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