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Hollande urges Israeli settlement halt in West Bank

French President Francois Hollande called on Israel on Monday to halt settlement building on occupied territory, saying it hampers chances for a peace agreement with the Palestinians after he arrived in the West Bank city of Ramallah on Monday for talks with Palestinian President Mahmoud Abbas as part of his three-day visit to Israel and the Palestinian territories.

Israel has announced plans for thousands of new settler homes since U.S.-brokered peace negotiations with the Palestinians began in July after a three-year break.

"For the sake of peace and to reach a deal, France calls for the total and definitive end to settlement building because it compromises the two-state solution," Hollande said at a news conference with Palestinian President Mahmoud Abbas.

Palestinian negotiators have offered to resign in protest against the settlement drive. Abbas reaffirmed at the news conference the talks with Israel would continue for the full nine-month period agreed with the United States.

Hollande held talks on Sunday with Israeli leaders in Jerusalem. Upon his arrival in the West Bank on Monday, Hollande laid a wreath on the grave of late Palestinian leader Yasser Arafat.

Palestinians seek to establish a state in the West Bank and the Gaza Strip, now under the control of Abbas's Hamas Islamist rivals, with East Jerusalem as its capital. They fear Israel's settlements will deny them a viable country.

More than 500,000 Israelis live in the West Bank and East Jerusalem alongside 2.5 million Palestinians. Israeli cites historical and Biblical links to those areas.

Most countries consider the settlements Israel has built on land it captured in the 1967 Middle East war as illegal.

Hollande is expected to address the Knesset (Israel's parliament) later on Monday and attend an Israeli-French economic cooperation conference on Tuesday.

Israel has commended France for blocking an agreement between Iran and six world powers regarding Tehran's nuclear program at a recent meeting.

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