The move sent “a deeply negative signal about Israel’s approach to the bilateral relationship”, Clinton said in Washington on Friday.
The announcement was made during a visit by US Vice-President Joe Biden and, despite his protests, Israel says it will carry on with plans to build 1,600 housing units for Jewish settlers in mainly Palestinian East Jerusalem.
Clinton's comments were backed by the Middle East Quartet, which is made up of the European Union, the United States, Russia and the United Nations.
Former Palestinian Authority minister Mustafa Barghouti believes that the
announcement understated Israeli plans.
"The amazing thing is that even after Israel's 1,600 settlements were declared, we had a worse statement from the head of the municipality of Jerusalem Nir Barkat that there will be 50,000 more settlements, illegal units, in East Jerusalem," he told RFI.
Israel’s 48-hour blockade of the West Bank continued Saturday.
"They're not only sealing the West Bank,” says Barghouti. “Theree are massive attacks on the part of the Jewish settlers against Palestinian civilians, on the part of the Israeli army against non-violent peace activists and this is against the internationals who're in solidarity with the Palestinians."
Brazilian President Luiz Inacio Lula da Silva is to visit Israeli and Palestinian leaders next week.
The peace effort requires "someone with neutrality to speak the truth to the Israelis, to tell the truth to Palestinians, Iranians, Syrians, and whoever wants to hear the truth," he said in an interview released ahead of his departure, adding that the UN should play more of a role in the region as a “great articulator”.
In an interview with Haaretz newspaper he defended his decision to visit Iran as well as Israel.