UN Secretary-General Ban Ki-moon has declared that Israeli settlements in the West Bank are illegal.

The Secretary-General, meeting with Palestinian Prime Minister Salam Fayyad during a tour of the West Bank this weekend said: "The world has condemned Israel's settlement expansion plans in East Jerusalem. Let us be clear, all settlement activity is illegal anywhere in occupied territory and this must stop."

Speaking at a news conference in the West Bank town of Ramallah, Ban encouraged all Palestinians to support negotiations.

He said negotiations would eventually lead to an end to the 1967 occupation of the West Bank.

Mr Ban was taken to see the settlement of Givat Ze'ev, which is home to 11,000 Israelis.

He was also able to see in the distance Jewish neighborhoods in disputed East Jerusalem.

Recently, Israel announced new plans to build 1,600 homes in a Jewish neighborhood of East Jerusalem.

While Washington has demanded that an end to the settlement project so peace talks can resume, Israeli Prime Minister Benjamin Netanyahu has said construction will go on as East Jerusalem is part of the capital of the State of Israel.