The Egyptian foreign minister and his US counterpart called on Israelis and Palestinians to resume talks in a joint press conference on Wednesday.
"Negotiations should resume as soon as possible between Israelis and Palestinians with clear terms of reference and with a clearly defined time-line," Foreign Minister Mohamed Kamel Amr told reporters after a meeting with US Secretary of State Hillary Clinton in Washington.
"Israeli illegal settlement activities continue to be an impediment in the road for peace, and we would like to see them stop," he added.
Israel announced the approval of 1,100 new homes in illegal East Jerusalem settlement Gilo on Tuesday, and Israeli Prime Minister Benjamin Netanyahu indicated in a press interview that he would not order a return to a partial settlement freeze that ended in September 2010.
President Mahmoud Abbas says he cannot return to talks with Israel while the state builds on occupied Palestinians lands.
Clinton said Egypt, the US and the Middle East Quartet would "urge the parties to put aside their reluctance or their distrust and begin the hard work of negotiating."
She praised Egypt's commitment to its peace deal with Israel, and thanked Amr for the Egyptian government's response to protesters' breach of the Israeli embassy's compound in Cairo in early September.
But the US official called for Egypt's rulers to scrap the emergency law reintroduced in the wake of the embassy unrest.
Egypt's ruling military council said the law would stay in place until June 2012, but Clinton told reporters, "we hope to see the law lifted sooner than that."
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