"Settlements are illegal in our view and an obstacle to peace settlement in the West Bank and East Jerusalem," Miliband told a news conference after talks with King Abdullah II.

"The settlements challenge the heart of... a Palestinian state."

His remarks came as US Secretary of State Hillary Clinton, who is on a regional tour, faces an Arab backlash after praising Israel's plan to ease settlement growth.

Clinton extended her trip to Egypt after she was criticised for calling "unprecedented" steps that Israeli Prime Minister Benjamin Netanyahu said he would take to limit settlement growth -- steps that fall far short of previous US demands for a complete halt to all settlement activity.

She later clarified her comments to say that Washington still considers the settlements to be illegal.

"It's so important for all those who care about security and social justice in this region that discussions about borders and territory are restarted in a serious way, because if you can progress on border and territory, you can resolve the settlements issue," Miliband said.

"The settlements are obviously an obstacle."

Click here to read the complete article by Ahmad Khatib, AFP, 3rd November 2009