European Union rotating president Lithuania called Monday for Israel to stop building settlements in the occupied West Bank, saying they were impeding the peace process.

The statement followed talks between Lithuanian President Dalia Grybauskaite and visiting Palestinian president Mahmud Abbas.

Grybauskaite called on Israel "to end the expansion of settlements in the occupied territories," insisting that "the European Union does not recognise settlements as part of Israel."

"Such actions by Israel impair the progress of peace talks," she said in an official statement published on her website.

Construction starts in Jewish settlements on occupied Palestinian land rose by 70 percent year-on-year in the first half of 2013, anti-settlement group Peace Now said last week.

Grybauskaite said the Middle East peace process was a "historic opportunity" which "must continue".

"The European Union strongly supports a peaceful two-state solution, which would enable Israel and Palestine to live side-by-side in peace and security," she said.

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.

Abbas has previously termed them "illegal" and asked the Israeli government to stop.