US secretary of state says the decision to build 3,000 settler homes in occupied territories is a set back for peace.

US Secretary of State Hillary Clinton has criticised Israel’s decision to build 3,000 settler homes in East Jerusalem and the West Bank.

“In light of today’s announcement, let me reiterate that this administration – like previous administrations – has been very clear with Israel that these activities set back the cause of a negotiated peace,” Clinton said on Friday.

Clinton was speaking at a forum in Washington hosted by the Saban Center for Middle East Policy. Avigdor Lieberman, the Israeli foreign minister, and Ehud Barak, defence minister, were in the audience when she made her remarks.

In a wide-ranging speech also tackling the conflict in Syria and Iran’s suspect nuclear programme, Clinton highlighted the troubled Middle East peace process, calling on Israelis and Palestinians to get back to negotiations.

“The most lasting solution to the stalemate in Gaza would be a comprehensive peace between Israel and all Palestinians, led by their legitimate representative, the Palestinian Authority,” Clinton said.

Israel revealed the settlement plans in response to a historic vote in the UN General Assembly on Thursday to recognise Palestine within the 1967 borders as a non-member observer state – one which the United States opposed.

“This week’s vote should give all of us pause. All sides need to consider carefully the path ahead,” Clinton said.

“We all need to work together to find a path forward in negotiations that can deliver on the goal of a two-state solution. That remains our goal.

“If and when the parties are ready to enter into direct negotiations to solve the conflict, President [Barack] Obama will be a full partner to them.”