By Avril Ormsby

LONDON, March 7 (Reuters) - Britain warned Israel on Friday over the expansion of Jewish settlements, saying any building on occupied Palestinian lands, including in East Jerusalem, was illegal under international law.

"We are very concerned about recent reports of Israeli settlement activity," Foreign Minister David Miliband said in a written response to a query during a question-and-answer session on www.reuters.co.uk

"Britain considers that Israeli settlement building anywhere in the occupied Palestinian territories is illegal under international law. This includes settlements in both East Jerusalem and the West Bank," he wrote.

The questions were asked last month and answered by Miliband on Thursday, before a Palestinian gunman shot dead at least eight students at a Jewish religious school in the western part of the city, the deadliest Palestinian attack on Israelis since April 2006.

Israel announced in February it intended to build 1,100 new homes in East Jerusalem, which Israel captured in the 1967 Middle East war and annexed unilaterally in a move that is not recognised internationally.

The Palestinians want East Jerusalem as the capital of a future state and fear Israel's building of settlements in the there is an attempt to dilute their presence in the city and cut them off from the rest of the West Bank.

Miliband said he had raised his concerns with both Israel's foreign minister, Tzipi Livni, and the defence minister, Ehud Barak.

"The Roadmap is clear," he said, referring to the 2002 peace plan drawn up by U.S. President George W. Bush.

"Israel should freeze all settlement activity, including the natural growth of existing settlements."

Britain's criticism follows a more critical line adopted by the United States in recent weeks towards Israel's settlement policies and its 40-year occupation of the West Bank, where around 2.5 million Palestinians live.

In a rare criticism of Israel, Bush in January described the country's settlement expansion as an "impediment" to peace, and during a visit to the region the same month said the occupation of the West Bank should end. (Editing by Sami Aboudi)

To read the full Q&A go to: http://blogs.reuters.com/ask/2008/03/07/the-foreign-secretary-answers-your-questions/

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