UN leader Ban Ki-moon warned Sunday that Israeli plans for new settlements in Israeli-occupied east Jerusalem and the West Bank would deal an "almost fatal blow" to any prospects for ‘peace’ with the Palestinians

UN leader Ban Ki-moon warned Sunday that Israeli plans for new settlements in Israeli-occupied east Jerusalem and the West Bank would deal an "almost fatal blow" to any prospects for ‘peace’ with the Palestinians.

Israeli announcement about the 3,000 settler homes, whose planned location was not revealed, came in the wake of a historic UN vote to upgrade Palestine's diplomatic status.

"Settlements are illegal under international law and, should the E-1 settlement be constructed, it would represent an almost fatal blow to remaining chances of securing a two-state solution," Ban's office said in a statement.

His spokesperson said Ban expressed "grave concern and disappointment" at the bid that risks completely cutting off East Jerusalem from the rest of the West Bank.

"The secretary-general repeats his call on all concerned to resume negotiations and intensify efforts towards a comprehensive, just and lasting peace and urges the parties to refrain from provocative actions," the statement added.

On Thursday, the United Nations General Assembly overwhelmingly backed a resolution recognizing Palestine within the 1967 borders as a non-member observer state.