Israel went on the diplomatic offensive over its illegal and internationally denounced policy of settlement in the occupied Palestinian territories.

Foreign Minister Avigdor Lieberman called in the ambassadors of Britain, France, Italy and Spain to "stress to them that their perpetual one-sided stance against Israel and in favour of the Palestinians is unacceptable and creates the impression they are only seeking ways to blame Israel."

The minister claimed that Israel was "making great efforts to enable continued dialogue with the Palestinians."

"Beyond being biased, unbalanced and ignoring the reality on the ground, the positions held by these states significantly harm the possibility of reaching some sort of agreement between the sides," Mr Lieberman's spokesman added.

Last Friday Israel announced plans for over 1,800 homes in the West Bank and east Jerusalem immediately after US Secretary of State John Kerry left the country following peace talks.

Israel's summoning of the ambassadors was a tit-for-tat action after European Union foreign policy chief Catherine Ashton said she was "deeply concerned" over the announcements, noting that settlements were "illegal under international law" and "constitute an obstacle to peace."

And Israeli ambassadors in London, Rome and Paris were called in to underline EU countries' opposition to the plans on Thursday.

But Prime Minister Benjamin Netanyahu slammed the EU as "hypocritical."

"The EU calls our ambassadors in because of the construction of a few houses? When did the EU call in the Palestinian ambassadors about incitement that calls for Israel's destruction?" he asked.

Mr Netanyahu claimed that this "imbalance pushes peace further away" and insisted that Israel's settlement plans should not be seen as a barrier to efforts to reach a deal with the Palestinians.

"We are keeping in line exactly with the understandings we undertook at the beginning of the talks," he claimed.

"Israel undertook no restraints on construction."

However, Palestinian negotiators insist that when they had agreed not to press a long-standing demand that Israel halted settlement construction as a precondition of peace talks, they had received assurances that Israel would show restraint by not taking such provocative actions.