France, Germany, Italy and Spain have called on Israeli authorities to stop the construction of new housing in East Jerusalem.
The foreign ministries of the European countries said in a statement the hundreds of new buildings would “constitute an additional obstacle to the two-state solution".
The statement comes on the day Israeli forces carried out a predawn raid to evict Palestinians from their homes, before demolishing the property in the Sheikh Jarrah neighbourhood of occupied East Jerusalem.
On Wednesday, heavily armed police guarded the site opposite the British consulate in Sheikh Jarrah, where mass protests erupted last year over the eviction of Palestinian residents.
The Palestinian Foreign Ministry condemned the bulldozing of the property as a “heinous crime”.
Israeli forces arrived at the site on Monday to evict the Palestinian residents following a decision by the Jerusalem municipality to expropriate the land.
Earlier in January, Israeli authorities approved plans for the construction of around 3,500 homes in East Jerusalem, nearly half of which are to be built in the controversial areas of Givat Hamatos and Har Homa.
The European countries said building in this area would further disconnect the West Bank from East Jerusalem and that these settlements are a violation of international law.
The Israeli ministry of foreign affairs did not immediately respond to Reuters' request for comment.
Israel captured East Jerusalem, including the Old City, in a 1967 war and later annexed it, a move not recognised internationally.
Palestinian home destroyed in Sheikh Jarrah — in pictures
Palestinians want East Jerusalem for the capital of a state they seek in the Israeli-occupied West Bank, which shares a boundary with the city, and the Gaza Strip. Israel views the entire city as its indivisible capital.
Most world powers deem the Israeli settlements illegal for taking in territory where Palestinians seek statehood.
It comes on the day Palestinian Foreign Minister Riad Malki accused US President Joe Biden on Wednesday of moving too slowly to reverse the Trump administration’s adverse policies against Palestinians.
He criticised Mr Biden for not using Washington’s special relationship to pressure Israel to abandon “its rejection of a two-state solution and peace negotiations.”
Mr Malki told the UN Security Council there were hopes that the end of Donald Trump’s administration and Benjamin Netanyahu’s Israeli government “would be enough to pave the way for renewed momentum for peace”.