Egypt condemned on Wednesday the decision by the Israeli government to allow the construction of 3,500 new settlements in the Palestinian West Bank, the Egyptian foreign ministry said.

"This violates international law as represented in the resolutions of the UN Security Council related to the Palestinian issue, and it also undermines the opportunities for peace based on a two-state solution," the statement said.

On Tuesday, Israeli Prime Minister Benjamin Netanyahu said he would move forward with the long-dormant project to build 3,500 homes for Jewish settlers in one of the most sensitive areas of the occupied West Bank.

Egypt has long stood behind a two-state solution, with a Palestinian state along the 1967 borders with East Jerusalem as its capital.