Jordan's King Abdullah and Palestinian President Mahmoud Abbas criticized on Sunday Israels decision to continue building settlements in the West Bank, saying it is "derailing" peace in the region.

The two leaders met on Sunday to discuss the Palestinian Authoritys plan to seek recognition by the United Nations of an independent Palestinian state within the 1967 borders as well as the ongoing revolts in the Arab world.

Open gallery view Palestinian President Mahmoud Abbas attends a meeting of the Palestinian leadership in Ramallah in May, 2011. Credit: AP

"King Abdullah made it clear that Israel's continuation of settlement building will demolish peace and will not help the quest of confidence-building between the Palestinians and Israelis," a royal court statement said.

The monarch pointed out that any solution for the Palestinian- Israeli conflict "should address all final status issues, foremost the questions of refugees and Jerusalem, the setting up a just peace and ending the state of tension in the region."

Abbas told state-run Jordan television that his discussions with King Abdullah covered the Palestinian intension "to go to the United Nations in September to seek recognition of the Palestinian state on the 1967 border" as well as the recent reconciliation between his Fatah party and the Hamas faction.

The two groups signed a unity deal earlier this year after a five-year-rivalry.