The United Nations Security Council is due to vote on a draft resolution that would demand Israel “immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem”.
Egypt circulated the draft late on Wednesday and a vote was scheduled for 3pm (20:00 GMT) on Thursday.
Israeli settlements are illegal under international law and seen as major stumbling block to peace efforts as they are built on Palestinian land occupied by Israel.
The Palestinians want an independent state in the West Bank, Gaza and East Jerusalem, areas Israel captured in a 1967 war.
Israel disputes that settlements are illegal and says their final status should be determined in any future talks on Palestinian statehood.
The UN maintains that settlements are illegal and has repeatedly called on Israel to halt them, but UN officials have reported a surge in construction over the past months.
A resolution needs nine votes in favour and no vetoes by the United States, France, Russia, Britain or China to be adopted. A similar resolution was vetoed by the US in 2011.
The US should veto the anti-Israel resolution at the UN Security Council on Thursday.— Benjamin Netanyahu (@netanyahu) December 22, 2016
Wednesday’s draft text says the establishment of settlements by Israel has “no legal validity and constitutes a flagrant violation under international law”.
It also states that Israeli settlements are “dangerously imperiling the viability of the two-state solution” that would see an independent state of Palestine co-exist alongside Israel.
The text stresses that halting settlements was “essential for salvaging the two-state solution, and calls for affirmative steps to be taken immediately to reverse the negative trends on the ground”.
UN diplomats see the resolution as a final chance for council action on the Middle East before Republican President-elect Donald Trump succeeds Democrat Obama on January 20.
Trump has signaled he would support Israel in a number of critical areas and not pressure it to engage in talks with the Palestinians.
Obama’s administration, however, has been highly critical of Israeli settlement construction in the occupied West Bank and East Jerusalem.
In October, the US joined the European Union, the UN and Russia in calling for a halt to the settlements in a report released by the so-called diplomatic Quartet on the Middle East.
The report was to serve as the basis for reviving the Israeli-Palestinian peace process which has been comatose since a US initiative collapsed in April 2014.
The Quartet report said at least 570,000 Israelis were living in the settlements.
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