Britain and France have both summoned Israeli ambassadors in protest at Israel's decision to approve the construction of 3,000 new homes in the West Bank and East Jerusalem.
The UK said the move would cast doubt on Israel's "stated commitment to achieving peace with the Palestinians".
Israel authorised the 3,000 additional housing units a day after the UN voted to upgrade Palestinian status.
An official close to the prime minister said Israel would not change its mind.
"Israel will continue to stand by its vital interests, even in the face of international pressure, and there will be no change in the decision that was made," an official in Prime Minister Benjamin Netanyahu's office said.
Sweden has also summoned the Israeli ambassador, while Russia and Germany have expressed their opposition to the settlement plans.
The UN has warned the homes would be "an almost fatal blow" to peace hopes.
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