MOSCOW (Reuters) -- Russia urged Israel on Monday to reconsider plans to expand Jewish settlements on occupied land after Palestinians won de facto UN recognition of statehood, saying building new homes would undermine any chance for direct peace talks.
In a statement issued a day after Israeli Prime Minister Benjamin Netanyahu brushed off condemnation from the United States and European nations, Russia also criticized Israel's announcement it was withholding Palestinian tax revenues.
Russia "views these Israeli intentions with the most serious concern", the Foreign Ministry statement said.
"Implementation of the announced plans for large-scale settlement activity would have a very negative effect on efforts to resume direct negotiations aimed at a two-state solution of the Palestinian-Israeli conflict," it said.
Stung by the UN General Assembly's upgrading of the Palestinians' status from "observer entity" to "non-member state", Israel said on Friday it would build 3,000 more settler homes in the West Bank and East Jerusalem, areas Palestinians want for a future state, along with Gaza.
Russia voted for the status upgrade but said it must not be treated as an alternative to a negotiated peace process.
Israeli Prime Minister Benjamin Netanyahu on Sunday brushed off condemnation of Israel's new settlement plans, saying: "We will carry on building in Jerusalem and in all the places that are on the map of Israel's strategic interests."
Israel also announced it was withholding Palestinian tax revenues this month worth about $100 million.
The Russian statement on Monday said such a move would "complicate the already difficult socio-economic and humanitarian situation in the Palestinian territories".
Russia is a member of the Quartet of Middle East peace mediators, along with the United States, the United Nations and the European Union.
President Vladimir Putin has tried to balance relations with Arabs including the Palestinians, dating back to the Soviet era, with improved ties to Israel during his 13 years in power.
Israel has occupied the West Bank, Gaza Strip and East Jerusalem since 1967.