French EU Presidency expresses deep concern over Israel's intention to build 447 new housing units

Israel's decision to approve the building of hundreds of new housing units in the Jerusalem area undermines the credibility of the Middle East peace process, the European Union said on Friday.

A statement from the French EU Presidency said it was deeply concerned by the Israeli move.

"This decision serves to undermine the credibility of the ongoing peace process," it said, adding that the building of such settlements was illegal under international law.

"Settlement activities prejudge the outcome of final status negotiations and compromise the viability of a concerted two-state solution," the EU statement said, calling on Israel to freeze settlement activities.

Israel issued a tender for the construction of 447 housing units in settlements in the Jerusalem area on Thursday, drawing criticism from Palestinians who accused the Jewish state of sabotaging chances of peace.

Several similar tenders have been issued since Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas launched US-sponsored peace talks last November.