The four European members of the United Nations security council are drawing up a strong joint condemnation of recent Israeli moves to expand Jewish settlements in East Jerusalem amid growing international censure.

The unusual statement, expected this week from the UK, France, Germany and Portugal, follows blunt criticism from the US of Israel's announcement on Monday of plans to build an extra 1,500 homes in the settlement of Ramat Shlomo.

US state department spokeswoman Victoria Nuland said: "We are deeply disappointed that Israel insists on continuing this pattern of provocative action. These repeated announcements and plans of new construction run counter to the cause of peace. Israel's leaders continually say that they support a path towards a two-state solution, yet these actions only put that goal further at risk."

William Hague, the British foreign secretary, urged Israel to revoke the decision, saying that if it was implemented "it would make a negotiated two-state solution, with Jerusalem as a shared capital, very difficult to achieve". All Israeli settlements were "illegal under international law", he added.

French officials also sharply condemned the move, describing it as illegal colonisation.

According to Palestine's envoy to the UN, Riyad Mansour, all members of the 15-strong security council, with the exception of the US, will add their weight to international condemnation following the council's Middle East meeting on Wednesday. They will say continuing settlement activity is illegal and must stop, he said.

On Tuesday, the general assembly passed a non-binding resolution condemning settlement activity by 196 votes to six.

The approval of the next stage in the construction of hundreds of apartments in Ramat Shlomo, across the pre-1967 Green Line, follows Israeli prime minister Binyamin Netanyahu's authorisation last month of the development of a controversial expanse of land near Jerusalem known as E1.

The Ramat Shlomo plan caused a major diplomatic row between Israel and the US when it was first announced during a visit to Jerusalem by US vice-president Joe Biden in the spring of 2010.

Construction on E1 has been opposed by the US for many years as it would in effect close off East Jerusalem – intended to be the future capital of Palestine – from the West Bank, and further divide the West Bank into northern and southern spheres.

Planning authorities are this week also considering the next stage in plans to develop a new settlement in the south of the city, called Givat Hamatos, which would add to the ring of settlements blocking easy access between Bethlehem and Jerusalem.

Netanyahu has made it clear that the acceleration of settlement expansion around Jerusalem is a direct response to the UN general assembly's recognition of the state of Palestine last month.

But some Israeli analysts believe it is also being driven by next month's general election in Israel, in an attempt to consolidate the rightwing vote for the ruling Likud party in coalition with hardliner Avigdor Lieberman's Yisrael Beiteinu.

"This is our campaign," a Likud source told the Israeli daily Ma'ariv. "Until now, it has worked excellently. The timing is deliberate."

European diplomats in Jerusalem warn that the construction of Givat Hamatos and the development of the E1 area are "game-changers" which could kill any chance of a two-state solution to the Israeli-Palestinian conflict.