The so-called Quartet of Middle East mediators on Friday called on Israel to stop all settlement activities and denounced Israel's plan to build new housing in East Jerusalem.
The Israeli announcement of the construction of 1,600 new settler houses led the Palestinians to call for a halt to peace talks and triggered the worst crisis in US-Israeli relations in years.
Hours before the quartet met, Israel air strikes wounded two civilians in the Gaza Strip on Friday, at least six places were attacked.
The quartet -- Russia, the United States, the United Nations and the EU -- issued a statement renewing its condemnation of Israel's settlement expansion plans for the second time in a week.
"The Quartet urges the government of Israel to freeze all settlement activity, including natural growth, dismantle outposts erected since March 2001 and to refrain from demolitions and evictions in East Jerusalem," UN Secretary General Ban Ki-moon said.
"Unilateral actions taken by either party cannot prejudge the outcome of negotiations and will not be recognized by the international community," he added, reading from a statement agreed after a Quartet meeting in Moscow.
The Quartet also urged Israel and the Palestinians to resume talks on final status issues with the aim of finding a settlement within the next 24 months, Ban said.
He said such a settlement would end the occupation which began in 1967 and result in the emergence of an independent, democratic and viable Palestinian state living side by side in peace and security with Israel and its other neighbours.
It "condemns the decision by the government of Israel to advance planning for new housing units in East Jerusalem."
The statement also expressed concern about the situation in Gaza, Ban said.
Two civilians were wounded in one of three attacks on tunnels along the border with Egypt. The other attacks included two open areas in Khan Younis and a metal foundry near Gaza City.
An Israeli military spokesman confirmed the attacks, Reuters news agency said.
"The quartet is deeply concerned by the continuing deterioration in Gaza including the humanitarian and human rights situation of the civilian population and stresses the urgency of a resolution to the Gaza crisis."
U.N. Secretary-General Ban Ki-moon said he would travel from the Moscow meeting to Gaza on Sunday to see the situation on the ground there for himself.
Chief Palestinian negotiator Saeb Erakat welcomed the Quartet's call, but asked also for a mechanism to make sure that Israel does effectively halt completely all settlement activity in the West Bank and east Jerusalem.
"We welcome the statement and we urge the Quartet to turn its statements into binding mechanisms on the ground so that Israel honours its commitments, above all halting all settlement activity in all the Palestinian territories -- the West Bank and east Jerusalem," Erakat said.
The international community regards all Jewish settlement constructions on occupied Palestinian land as illegal.
Clinton met her Russian counterpart Lavrov, the U.N.'s Ban, EU foreign policy chief Catherine Ashton and Quartet Representative Tony Blair over a closed dinner on Thursday evening before Friday's formal meeting.
The quartet was formed in 2002 in Spain. It last met on the margins of the U.N. General Assembly in September.
Quartet calls on Israel to stop settlements
Quartet called on Israel to stop all settlement activities and denounced Israel's plan to build new housing in East Jerusalem.