Middle East minister Alistair Burt used a visit to Israel this week to condemn new settlement building in East Jerusalem. He said the construction of 1400 new apartments in Gilo would damage future prospects of peace.

"We have always been clear that settlements are illegal and an obstacle to peace. Pushing ahead with this plan would be a deeply unhelpful move and hinder efforts to resume talks between the two parties leading to a two-state solution to this conflict, with Jerusalem as the shared capital of the two states living side by side in peace and security."

Mr Burt's statement is in line with the consistent UK position on settlement building. The new apartments are being built by the Jerusalem Development Authority, a joint initiative of the Israeli government and the Jerusalem municipality. Senior Palestinian negotiator Saeb Erekat said the decision to continue construction showed the Israeli government had chosen settlements over peace.

The Middle East minister's visit took in a visit to areas devastated by the Mount Carmel fire. He also had talks with his opposite number in the Israeli government, Danny Ayalon, Foreign Minister Avigdor Lieberman and Salam Fayyad, Prime Minister of the Palestinian Authority. Members of the Arab community in Nazareth, who met Mr Burt in Nazareth, expressed their concern about the commission of inquiry into NGOs. A statement from the British embassy in Israel said: "The UK has funded many of the organisations which could be probed, and believe that they play a critical role in the region and help contribute towards resolving the conflict between the sides."

Shadow Foreign Secretary Yvette Cooper re-confirmed Labour's opposition to settlement building after her first visit to the Middle East last month. The former Labour Cabinet member urged the EU to introduce labelling to identify products made by Israeli settlers.