Deputy Prime Minister Nick Clegg has described Israeli settlement building as "an act of deliberate vandalism" in a sign that the UK is hardening its rhetoric towards the Netanyahu government. His comments provoked anger in Jerusalem, while appearing to highlight differences of approach to the Israel-Palestinian conflict at the highest level of the coalition.

Speaking on Monday during a visit by the Palestinian president Mahmoud Abbas, Mr Clegg said there was no stronger supporter of Israel than himself, but that he condemned "continued settlement building in the strongest possible terms".

"Once you've placed physical facts on the ground that make it impossible to deliver something that everyone has for years agreed is the ultimate destination [peace via a two-state solution] ... it is an act of deliberate vandalism to the basic premise on which negotiations have taken place for years and years and years. And that is why we have expressed our concerns as a government."

Mr Abbas welcomed the remarks, saying that it was "exactly what we had waited to hear officially."

The Palestinian leader had further meetings with David Cameron and William Hague.

Israeli Foreign Ministry spokesman Yigal Palmor said: "It would be much better to contribute to peace by encouraging the fragile revival of Israeli-Palestinian talks rather than engaging in gratuitous bashing."

Prime Minister David Cameron later raised settlement building in more muted terms: "We think that time, in some ways, is running out for the two-­state solution unless we can push forward now, because otherwise the facts on the ground will make it more and more difficult, which is why the settlement issue remains so important."

At a meeting between the Jewish Leadership Council and Mr Cameron shortly before the Clegg press conference on Monday, it is understood the Prime Minister was told that it would not be helpful to provoke the Israeli government on the issue of settlements.

Sources close to a JLC member who was present said that there appeared to be a stark and palpable contrast between the tone and langauge used by the PM and that used by his deputy.

Liberal Democrat Friends of Israel chairman Gavin Stollar said: "Many observers will agree with Nick Clegg that settlement expansion does not help peace. We agree with Mr Clegg that, as he said recently: 'No Israeli should have to live in fear of terrorism. I want to see a prosperous and confident Israel, able to live in peace.'"

But Conservative Friends of Israel director Stuart Polak took issue with the "deliberate vandalism" comments. He said: "Nick Clegg's language was unhelpful and inflammatory. The government's position was clearly laid out by Alistair Burt in his speech at Bar Illan University last week and by William Hague yesterday."