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World Bulletin / News Desk

British Foreign Secretary William Hague said on Tuesday that European sanctions against Israel in response to settlement building was not an option, but he was discussing with other foreign ministers what to do if construction went ahead.

"I don't think there is enthusiasm around the European Union  about economic sanctions in Europe on Israel. I don't believe there would be anywhere near a consensus nor is that our approach. We continue to try to bring both sides back to negotiations," Hague told parliament. 

The decision to build in a key area east of Jerusalem, called E1, sparked a storm of diplomatic protest from Washington and Brussels as well as from U.N. chief Ban Ki-moon, who on Sunday warned it would deal an "almost fatal blow" to the prospects of resolving the conflict.

E1 is a highly contentious area of the West Bank that runs between the easternmost edge of occupied east Jerusalem and the Maaleh Adumim settlement.

Palestinians bitterly oppose the E1 project, as it would effectively cut the occupied West Bank in two, north to south, and sever it from Jerusalem, and make the creation of a viable Palestinian state even more impossible.