U.S. "deeply disappointed" in Israel settlement move

Palestinian labourers work on a construction site in a Jewish settlement near Jerusalem known to Israelis as Har Homa and to Palestinians as Jabal Abu Ghneim November 2, 2011.

WASHINGTON (Reuters) - The United States is "deeply disappointed" with Israel's decision to speed up settlement building following UNESCO's decision to grant full membership to the Palestinians, the White House said on Wednesday.

White House spokesman Jay Carney said the move did not advance the goal of bridging long-standing differences between Israelis and the Palestinians.

Israel decided on Tuesday to accelerate Jewish settlement building on land the Palestinians want for a state and to withhold Palestinian Authority funds, moves likely to further hold up international efforts to revive long-stalled peace talks.

The Palestinians are looking to establish a state in the West Bank, Gaza Strip and East Jerusalem, land Israel seized in the 1967 Middle East War.

President Barack Obama has little to show for more than two and a half years of Middle East diplomacy, which was dealt a further blow when the Palestinians went ahead with a bid for U.N. recognition of statehood despite his opposition.

"We are deeply disappointed by yesterday's announcement about accelerated housing construction in Jerusalem and the West Bank," Carney told reporters.

"Unilateral actions work against efforts to resume direct negotiations and they do not advance the goal of a reasonable and necessary agreement between the parties," he said.

Israel's move came a day after the United Nations Educational Scientific and Cultural Organization (UNESCO) awarded the Palestinians full membership, a diplomatic victory for the Palestinian Authority in its push for statehood recognition.

Israel called the UNESCO decision a "tragedy." The United States said it would stop its funding of the organization.

UNESCO is the first U.N. agency the Palestinians have joined as a full member since President Mahmoud Abbas applied for full membership in the United Nations on September 23. Among UNESCO's tasks are designating World Heritage sites, promoting education around the world, and managing a tsunami early-warning system in the Pacific.

(Reporting by Matt Spetalnick and Jeff Mason; Editing by Will Dunham)