A draft of a European Union resolution said the EU was “deeply dismayed” by Israeli plans for new construction in settlements but did not mention sanctions.

The draft resolution, which was obtained by the French news agency AFP, said Israeli settlement construction “threaten peace efforts.”

It had been prepared for EU foreign ministers ahead of their meeting on Monday in Brussels, AFP reported.

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“The European Union is deeply dismayed by and strongly opposes Israeli plans to expand settlements in the West Bank,” said a draft of the conclusions on the Middle East peace process at a one-day meeting in Brussels.

The plan “would seriously undermine the prospects of a negotiated resolution of the conflict,” since it would question the viability of the two states supposed to emerge through the peace process, the draft said. The EU “reiterates that settlements are illegal under international law and constitute an obstacle to peace,” it added.

To this end, the draft continued, both sides must “engage in direct and substantial negotiations without pre-conditions in order to achieve a lasting solution to the Israeli-Palestinian conflict, ending all claims.”

The EU also called on the Palestinian leadership to use the U.N. upgrade constructively and not take steps that would “deepen the lack of trust and lead further away from a negotiated solution.” The U.N. General Assembly recently upgraded the Palestinians to non-member state observer status.

The Israeli government has been rapped for its plans to build 3,000 new housing units in Jerusalem and the West Bank, including in the E1 corridor that connects the Maale Adumim settlement to Jerusalem. The plan is being seen by the Palestinians and many nations as compromising the two-state solution because it undermines the territorial contiguity of the Palestinian-controlled areas in the West Bank.

The Jerusalem Post quoted Israeli Prime Minister Benjamin Netanyahu as saying Monday that assertions that construction in the E1 corridor would preclude the eventual emergence of a Palestinian state were “simply false.”

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