US President Barack Obama's top national security aide on Thursday blamed Israeli settlement expansion announcements for some of the latest tensions between Israel and the Palestinians as US-brokered peace talks between the two sides have faltered.

In a speech to a Washington think tank, Susan Rice, Obama's national security adviser, said the United States remained committed to Middle East peacemaking, but made it clear that it saw Jewish settlement construction plans as hampering those efforts.

"We have seen increased tensions on the ground. Some of this is a result of recent settlement announcements. So let me reiterate: The United States does not accept the legitimacy of continued Israeli settlement activity," she said.

Her remarks to a conference of the Middle East Institute drew applause from an audience that included former and current US officials, foreign diplomats, some from Arab countries, and regional experts.

Rice's criticism echoed US Secretary of State John Kerry, who urged Israel on a visit to the region last week to limit settlement building in occupied territories - an activity he called "illegitimate" - to help push peace talks back on track.

US-Israeli discord over settlements has added to strains between the close allies over how to deal with Iran's nuclear program. Prime Minister Binyamin Netanyahu has warned that the United States and other world powers are negotiating a "bad deal" with Tehran, Israel's arch-foe.

Palestinian Authority President Mahmoud Abbas said on Wednesday his delegation of peace negotiators had resigned over the lack of progress in statehood talks with Israel. The development would mark a new low point for the talks, which resumed in July.

Abbas suggested the negotiations would continue but that he would need a week to resume talks.

Palestinians want to establish a state in the West Bank and in the Gaza Strip, an area controlled by Hamas Islamists opposed to Abbas' peace moves, with east Jerusalem as the capital. They argue that Israeli settlements deny them a viable country.

Since the talks resumed after a three-year break, Israel has announced plans for several thousand new Jewish settler homes in the occupied West Bank and East Jerusalem.

The disclosure on Tuesday that Israel's Housing Ministry had commissioned separate plans for nearly 24,000 more homes for Israelis in the two areas raised US concern and drew Palestinian condemnation.

Netanyahu, an advocate of settlement construction, intervened later in the day, ordering a halt to the projects and saying he feared an international outcry that would divert attention from Israel's lobbying against an Iran nuclear deal.

Insisting that US opposition to settlement activity was "not new" and had been US policy for decades, Rice said, "The only way to resolve these kinds of critical issues is at the negotiating table."

She praised Netanyahu and Abbas for some "important steps" to spur the peace process, but acknowledged, "It won't be easy."

Netanyahu has accused the Palestinians of creating "artificial crises" over the settlement issue and has said that most of Israel's building in the West Bank and East Jerusalem is in areas it intends to keep in any future peace deal.

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