"We call on Israel to show restraint in the matter of settlement building," Merkel told a joint press conference after talks with the Palestinian Authority Chief Mahmoud Abbas in Berlin.
Construction starts in Jewish settlements on occupied Palestinian land rose by 70 percent year-on-year in the first half of 2013, activist group Peace Now said Thursday.
The Israeli organization said the Tel Aviv regime began the construction of 1,708 new settler units in the West Bank between January and June of 2013, compared with 995 units during the same period in 2012.
Settlement building in the territories occupied by Israel during the 1967 Six Day War is considered illegal under international law, and the issue remains one of the most divisive in the Israeli-Palestinian conflict.
The Israeli regime has been under fire from the international community, including its own allies, over its expansionist policies. However, the regime defies calls to abandon its illegal activities.
Abbas said Israeli illegal settlement construction in the occupied territories had "in fact, increased enormously".
"We ask the Israeli regime to stop this activity," he told reporters through an interpreter.
Senior Palestinian negotiator Saeb Erakat told AFP Thursday that the settlement building was "destroying the peace process", relaunched with US prodding in July.
Over half a million Israelis live in more than 120 settlements built since Israel’s occupation of the Palestinian territories of the West Bank and East al-Quds in 1967.
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