The European Union (EU) said on Monday that it was deeply dismayed and strongly opposed to the Zionist plans for settlement expansion.

The European Union (EU) said on Monday that it was deeply dismayed and strongly opposed to the Zionist plans for settlement expansion, Xinhua news agency reported.

"The European Union is deeply dismayed by and strongly opposes Israeli plans to expand settlements in the West Bank, including in East Jerusalem, and in particular plans to develop the E1 area," said a statement following the EU Foreign Affairs Council meeting in Brussels.

It added the E1 plan would seriously undermine the prospects of a negotiated resolution to the conflict by jeopardizing the possibility of a contiguous and viable Palestinian state and of Jerusalem as the future capital of two states.

The EU reiterated that settlements were illegal under international law and constituted an obstacle to peace, stating that it would closely monitor the situation and its broader implications and act accordingly.

The EU expressed its commitment to ensuring that all agreements between the Zionist entity and the European Union must unequivocally and explicitly indicate their inapplicability to the territories occupied by the entity in 1967, "namely the Golan Heights, the West Bank including East Jerusalem, and the Gaza Strip".

The EU also called on the entity of occupation to avoid any step undermining the financial situation of the Palestinian Authority.

"Any such action by Israel would undermine existing cooperation mechanisms between Israel and the Palestinian Authority and thus negatively affect the prospects of negotiations," said the statement.

The Zionist entity announced its new settlements expanding plans soon after the U.N. General Assembly upgraded the status of Palestine from observer entity to a "non-member state".