The international Quartet of Middle East peace mediators has urged Israel to freeze all settlement activity.
Speaking for the Quartet, UN Secretary General Ban Ki-moon condemned Israel's announcement of plans to build 1600 new homes in disputed East Jerusalem.
Mr Ban and foreign ministers from US, the EU, and Russia have met in Moscow to see if talks can be revived between the Israelis and the Palestinians.
After the East Jerusalem building plans were announced last week, the Palestinians declared they could not begin US-brokered indirect, or "proximity", talks with the Israelis.
However, speaking to the BBC, US Secretary of State Hillary Clinton indicated that hardening the tone with Israel had paid off, with talks now back in prospect.
Mr Ban, who was about to fly to the Middle East, stated the goal of an Israeli-Palestinian peace agreement - including a Palestinian state - within two years.
Palestinian chief negotiator Saeb Erekat welcomed the Quartet's statement and urged it to set up a surveillance mechansim to ensure Israel stops all settlement activity in the West Bank and East Jerusalem.
Hours before the session - the BBC reports - Mrs Clinton received a phone call from Israeli prime minister Binyamin Netanyahu with details of confidence-building measures his government would take. No details were given.
Fresh Israeli strikes
Palestinian officials say at least 11 people have been injured in Israeli warplane attacks on Gaza on Friday.
The Israeli military confirmed the missile strikes near Rafah, in southern Gaza, which it said targeted militants.
It was the second night of Israeli raids since a rocket fired from the Gaza Strip killed a worker on an Israeli farm on Thursday.
He was the first person to be killed by rocket fire in southern Israel since the Israeli campaign in Gaza last year.
