BERLIN (Reuters) - The European Union should recognise a Palestinian state after the United States expressed support for Israeli settlements in the occupied West Bank, Luxembourg Foreign Minister Jean Asselborn said on Wednesday.

FILE PHOTO: Luxembourg Foreign Minister Jean Asselborn addresses the 72nd United Nations General Assembly at U.N. headquarters in New York, U.S., September 21, 2017. REUTERS/Eduardo Munoz

Monday’s announcement by Secretary of State Mike Pompeo abandoned the position that settlements in Israeli-occupied territory were “inconsistent with international law”, reversing a stand taken under President Jimmy Carter in 1978.

Palestinians say the settlements jeopardise their goal of a state in the West Bank and Gaza Strip, with East Jerusalem as its capital, and that the U.S. move will make an Israeli-Palestinian peace deal even more elusive.

“Recognising Palestine as a state would be neither a favour nor a carte blanche but rather a mere recognition of the right of the Palestinian people to its own state,” Asselborn told Reuters. “It would not be meant against Israel,” he said, but a measure intended to pave the way for a two-state solution.

The Trump administration’s decision was a victory for Israeli Prime Minister Benjamin Netanyahu, who is struggling to remain in power after two inconclusive Israeli elections this year, and a defeat for the Palestinians.

It could deliver a new blow to Trump’s efforts to resolve the Israeli-Palestinian conflict through a peace plan that has been in the works for more than two years but has drawn widespread scepticism even before its release.

The EU said after the U.S. announcement that it continued to believe that Israeli settlement building in occupied Palestinian territory was illegal under international law.

The European Parliament adopted a resolution in 2014 supporting Palestinian statehood in principle. The motion was a compromise reached after lawmakers on the left sought to urge the EU’s 28 member states to recognise Palestine unconditionally.

Since the collapse of U.S.-sponsored peace talks in 2014, Israel has pressed on with building settlements in territory the Palestinians want for their future state.

More than 135 countries already recognise a Palestinian state, including several east European countries that did so before they joined the EU.