UNITED NATIONS — The United Nations on Wednesday called on Israel to cancel plans to build thousands of new settler homes in the occupied Palestinian territories, warning it could be "an almost fatal blow" to peace hopes.

U.N. leader Ban Ki-moon's political chief also told the Security Council that Israel must resume the transfer of frozen tax and customs money to the struggling Palestinian Authority "without delay."

Israel has stepped up announcements for construction approvals in the occupied West Bank, including east Jerusalem, since the Palestinians won a U.N. vote on November 29 to secure non-member state recognition.

U.N. Assistant Secretary General for Political Affairs Jeffrey Feltman reaffirmed the widely held view that Israel's settlement construction violates international law.

"If implemented, these plans would represent an almost fatal blow to remaining chances of securing a two-state solution," he told the Security Council.

"We strongly urge the Israeli government to heed the international calls to rescind these plans," Feltman said.

Israel on Wednesday issued tenders to build another 1,048 settler homes in annexed east Jerusalem and the occupied West Bank, a housing ministry spokesman said.

A planning committee also approved plans for 2,610 new homes in a settlement suburb of east Jerusalem, a monitoring group said.

So far this week, Israel has pushed through plans for 5,158 new settler homes, more than 80 percent of them in east Jerusalem, which the Palestinians want as a capital for a future state.

Feltman also condemned Israel's move to freeze payments of tax and customs fees that it collects for President Mahmoud Abbas' administration.

The action "undermines the integrity of the Palestinian Authority" and "casts doubt on Israeli compliance" with an international protocol on the money transfers, Feltman said.

He called on Israel to "to reconsider its decision and resume the transfer of funds without delay."