BRUSSELS—The European Union renewed calls on Israel to halt the expansion of settlements in the occupied West Bank, saying the latest Israeli funding decisions risk further undermining prospects for a negotiated two-state solution amid heightened regional tensions.
The appeal followed Israel's approval earlier this week of a 1.3 billion shekel (about $428 million) budget to establish 34 new settlements in the West Bank, according to the Israeli government. The package, backed by Prime Minister Benjamin Netanyahu's cabinet and announced by Finance Minister Bezalel Smotrich, also includes additional funding for infrastructure supporting settlement development.
In a statement issued on Friday, the European External Action Service said the EU "reiterates its call on Israel to refrain from further settlement expansion, the legalization of outposts, land appropriation, demolitions, evictions and other unilateral measures that undermine the viability of the two-state solution." The bloc said such actions could further fragment the occupied Palestinian territory and complicate efforts to achieve lasting peace.
Israel disputes the widely held international view that settlements in territory captured during the 1967 Middle East war violate international law. Israeli officials have argued that expanding communities in the West Bank strengthens national security and reflects historical and strategic interests. Smotrich has described the latest approvals as part of a broader policy to reinforce Israel's presence in the territory.
The issue has become another point of contention between Israel and several European governments as violence in the occupied West Bank and the broader region continues to fuel diplomatic concern. EU member states have also debated possible measures related to trade involving Israeli settlements, although they remain divided over whether and how to proceed.
The United Nations and most countries consider Israeli settlements in the occupied West Bank illegal under international law, a position reaffirmed in multiple UN resolutions. Israel rejects that interpretation. UN officials have also expressed concern that continued settlement activity, alongside violence affecting both Palestinians and Israelis, is increasing tensions and reducing prospects for a negotiated resolution to the conflict.
No indication has been given by the Israeli government that it intends to reverse the funding decision. The EU said it would continue to support efforts aimed at preserving the possibility of a negotiated two-state solution while urging all parties to avoid unilateral measures that could further escalate tensions.


