A senior United Nations official on Monday said that Jewish settlement complicates the process of building a Palestinian state.

Maxwell Gaylard, the UN Humanitarian Coordinator for the Occupied Palestinian Territories, reiterated the UN position that settlement in the West Bank and East Jerusalem is illegal.

"We don't only call for an end to settlement construction, we want them not to be in the Palestinian territories," Palestinian official news agency, Wafa, quoted Gaylard as saying, following a tour in the West Bank city of Nablus.

He also voiced support to the Palestinian National Authority's plan to upgrade national institutes to be ready for a future state.

Meanwhile, Nablus governor said the Palestinian leadership insists that settlement activities and peace negotiations cannot go together.

U.S.-brokered peace talks stopped in September, when Israel resumed settlement construction in the West Bank.

On Friday, the U.S. administration vetoed an Arab-endorsed bill condemning Jewish settlement activities. Fourteen members of the UN Security Council supported the draft resolution before the U.S. envoy blocked it.