United Nations Secretary-General Antonio Guterres urged Israel on Wednesday to abandon plans to annex settlements in the occupied West Bank, warning this threatened prospects for peace with the Palestinians. "If implemented, annexation would constitute a most serious violation of international law, grievously harm the prospect of a two-state solution and undercut the possibilities of a renewal of negotiations," Mr Guterres told the UN Security Council. "I call on the Israeli Government to abandon its annexation plans," he said. Israeli Prime Minister Benjamin Netanyahu's Cabinet is preparing to start discussions on July 1 on annexation of the West Bank, territory Israel captured in a 1967 war and that Palestinians seek for a state. Palestinians vehemently oppose the annexation plan, as do most world powers. Palestinian leaders have also completely rejected a peace proposal unveiled in January by US President Donald Trump, in which Washington would recognise Jewish settlements as part of Israel. "Should Israel decide to extend its sovereignty, it will be doing so with respect to areas over which it has always maintained a legitimate, historical and legal claim," Israel's UN Ambassador Danny Danon told the council. Senior aides to Trump began discussions on Tuesday on whether to give Mr Netanyahu a green light for his annexation plan. US Secretary of State Mike Pompeo said on Wednesday that extending Israeli sovereignty was a decision "for Israelis to make." "I understand that many of you have concerns," US Ambassador to the UN Kelly Craft told the council. "At the same time, we ask that you also hold the Palestinian leadership accountable for acts they are responsible for." Mr Guterres called on the Middle East Quartet of mediators - the United States, Russia, the European Union and the United Nations - "to take up our mandated mediation role and find a mutually agreeable framework for the parties to re-engage, without preconditions, with us and other key states." Mr Guterres' comments were echoed by Arab League head Ahmed Aboul Gheit, who warned the UN meeting that Israel’s annexation of parts of the West Bank would endanger Middle East peace and could ignite “a religious war in and beyond our region.” The secretary-general of the 22-member organisation said annexation “would not only be detrimental to the chances of peace today but will destroy any prospects for peace in the future.” He told the Security Council it will have “broader ramifications on the international security around the world.”