Israel’s plans for a new settler city in the West Bank came under fire Monday from the UK, the US, and the UN amid warnings that the move would further isolate Israel within the international community, while posing an obstacle to both a Gaza cease-fire and renewed efforts for a two-state solution.

“This is a particularly ill-judged decision that comes at a time when the priority must be to build on the cease-fire in Gaza. It will do serious damage to Israel’s standing in the international community,” Foreign Secretary Philip Hammond said.

“The UK deplores the Israeli government’s expropriation of 988 acres of land around the settlement of Etzion,” Hammond said in a statement.

“Our position on settlements is clear: They are illegal under international law, present an obstacle to peace, and take us further away from a two-state solution at a time when negotiations to achieve this objective urgently need to be resumed,” he said. “All efforts should currently be focused on securing a durable cease-fire in Gaza and the lasting peace that the Palestinian and Israeli people deserve.”

On Sunday Israel decided to reclassify 400 hectares (1,000 dunams) from survey land to state land in an area known as Gva’ot. The move followed an investigation by the Civil Administration that determined none of the parcels is private Palestinian property.

The reclassification allows the Gush Etzion Regional Council to submit plans to construct a fifth Jewish city in the West Bank. The other four are Modi’in Illit, Betar Illit, Ma’aleh Adumim, and Ariel.

Palestinians have charged that the reclassification is a land grab and say the property in question belongs to five area villages. The UK Foreign Office accused Israel of “expropriating” the land.

The United Nations and the United States have also urged Israel to reverse the decision.

The office of UN Secretary- General Ban Ki-moon said it is alarmed by reports of the Gva’ot project, calling settlement activity “illegal under international law” and saying it “runs totally counter to the pursuit of a two-state solution.”

Reuters quoted an unnamed US State Department official as saying it has “long made clear [its] opposition to continued settlement activity.”

“This announcement, like every other settlement announcement Israel makes, [every] planning step they approve and construction tender they issue, is counterproductive to Israel’s stated goal of a negotiated two-state solution with the Palestinians,” the official said. “We urge the government of Israel to reverse this decision.”

The controversy surfaced as Egypt continued in its attempts to broker a permanent cease-fire with Israel and Hamas, and as diplomatic efforts were under way to resume the peace process between Israel and the Palestinian Authority, which came to a dead end in April.

Israel’s recent war with Hamas has increased pressure on PA President Mahmoud Abbas to prove that the Palestinians can achieve more through diplomacy than through violence.

Britain’s condemnation of the Israeli announcement was the first of what is expected to be a wave of criticism from Europe. European diplomats strained on Monday to understand the logic of the move, which they said frustrated governments that gave Israel a wide degree of maneuverability during the Gaza operations.

“Is this the payback?” one diplomatic official asked.

The official said the move was particularly ill-timed considering that Israel would want the EU to help stymie expected Palestinian moves in the coming weeks and months at the UN. It will be difficult to convince the international community why the Palestinians cannot take unilateral steps at the UN when Israel takes unilateral steps in the territories, the official said.

An Israeli official dismissed charges that land had been expropriated. The reclassification is “part of a legal process that has been going on for years,” the official said.

There is now a 45-day-period for legal objections to be filed. People with claims to the land can now try and prove them, the official said, adding that Israeli courts are independent of the government.

However, Justice Minister Tzipi Livni (Hatnua), who headed Israel’s negotiating team with the Palestinians, said the move was indeed harmful to both the peace process and Israel’s claim to the land.

Livni stood by Israel’s position that the land would be within the country’s borders in any final status agreement with the Palestinians. In the past she has spoken about her support of this project, saying there is common agreement with regard to the future of the Gush Etzion area. However, she said, when an announcement like this is made, it gives people the mistaken impression that territory is disputed.

Economy and Trade Minister Naftali Bennett (Bayit Yehudi), who visited Gush Etzion on Monday, spoke in support of the Gva’ot project.

“The world has never loved it when we build, not before the creation of the state and not afterwards,” Bennett said. “We plan to continue. When Hamas murders us, we build.”

The parcel of land in question is near the area where Hamas members kidnapped and killed three Israeli teenagers in June. The Office of the Coordinator of the Government Activities in the Territories said on Sunday that a decision had been made to finalize the reclassification process in response to the deaths.

Gush Etzion Regional Council head Davidi Perl said he welcomes the announcement, saying it would strengthen Israel’s hold on territory that is a testament to the Jewish people’s eternal connection to the land.

“We came to Gush Etzion to stay here for eternity,” Perl said.

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