The European Union's foreign ministers called on Israel on Monday to halt all settlement activity in Palestinian areas, saying that it was illegal.

"The EU considers that settlement building anywhere in the occupied Palestinian Territories is illegal under international law. This includes Israeli settlements in both East Jerusalem and the West Bank," the ministers said in a joint statement.

"Settlement construction is an obstacle to peace. The EU is therefore deeply concerned by recent settlement activity," the statement said.

Ministers also commented on the spate of rocket attacks on Israel from Gaza last week, the subsequent Israeli closure of all crossings into the strip, and the storming of the border between Gaza and Egypt by tens of thousands of Palestinians.

The EU "condemns the continued firing of rockets into Israeli territory, and all other activities which are contrary to international law and endanger civilians," the statement said.

The EU "reiterates its grave concern at the humanitarian situation in Gaza and calls for the continuous provision of essential goods and services, including fuel and power supplies," it said.

At the same time, the statement praised the Egyptian government's mediation attempts and called for a "continued broad and constructive involvement by Arab partners."

And it welcomed the launch of a new EU aid mechanism for the Palestinian territories, which is set to come into force February 1.

The system will "constitute a key channel for EU and other international assistance," the statement said.