The city of Jerusalem is seeking to expand the settlement of Gilo beyond Israeli-annexed east Jerusalem with 2,500 new homes in the adjacent West Bank, an Israeli lawyer said on Friday.

Daniel Seiderman, a lawyer active in the anti-settlement movement, said that the idea was endorsed at a city planning meeting last month.

"Ten days ago the municipal planning board deliberated on a plan to build another 2,500 units in Gilo," he said. "The precise area is beyond the municipal... line of Gilo."

He said the intended enlargement would be in addition to plans formally announced last month for 2,000 new homes in Gilo, which lies just a few kilometres (miles) north of Bethlehem.

City councillor Meir Margelit confirmed the broad outline of the intended scheme but not the number.

"It's correct that the local committee approved building in Gilo. I don't remember how many units," he said.

"The planning committee approved (building) between Gilo and (the West bank town of) Beit Jala. I suspected that it's beyond the Gilo blue line but I couldn't check it completely."

Both men agreed the project could take a long time to reach fruition.

"If everything goes smoothly it's a matter of three years at least," Margelit said.

"If you're talking about... pregnancy, this isn't conception, just a glint in the eye," said Seiderman.

Palestinian president Mahmud Abbas's spokesman Nabil Abu Rudeina called on the United States and its partners in the diplomatic Quartet -- Russia, the United Nations and the European Union -- to take action against the latest Gilo initiative.

"We demand... that Washington and the Quartet hold Israel responsible for the destruction of the peace process," Abu Rudeina said from Paris, where Abbas is visiting.

In London, British Foreign Secretary William Hague condemned Israeli Prime Minister Benjamin Netanyahu's plan, announced on Wednesday, to add hundreds of new settlement homes elsewhere in the occupied West Bank.

"I condemn the announcement by Israel to authorise the building of 851 new settlement units across the West Bank," Hague said referring to Netanyahu's pledge to expand the Beit El settlement near Ramallah, after MPs rejected a bill which would have saved buildings in one of its neighbourhoods from demolition.

"The decision to move settlers from an illegal outpost by creating housing units in settlements elsewhere across the Green Line sets a dangerous precedent," he said in a statement.

"Continued systematic settlement activity, and repeated breaches by the Israeli Government of international law, is provocative, undermines the prospects of peace between Israel and the Palestinians, and makes the two state solution ever harder to realise."

Britain joined France and the United Nations in condemning Netanyahu's Wednesday pledge, in which he said "There is no government that supports, or will support, settlement more than my government."