Obama says Israeli settlement building 'dangerous'

US president Barack Obama put fresh pressure on Israel on Wednesday to curb its settlement projects, saying continued building could lead to a dangerous situation with embittered Palestinians.

"I think that additional settlement building does not contribute to Israel's security, I think it makes it harder for them to make peace with their neighbors," Obama told Fox News.

"I think it embitters the Palestinians in a way that could end up being very dangerous."

Obama has made achieving peace between Israelis and Palestinians a top priority among a long list of foreign policy goals, but progress in restarting talks between the two sides has been scant.

On Tuesday the White House said it was dismayed over Israeli approval to expand the Gilo settlement in Jerusalem.

Israel approved the building of 900 homes for Jews on West Bank land it occupied in the 1967 Arab-Israeli war and annexed to its Jerusalem municipality.

Obama has urged Israel to curb settlement expansion as a gesture of goodwill to Palestinians.

"The situation in the Middle East is very difficult, and I've said repeatedly and I'll say again, Israel's security is a vital national interest to the United States, and we will make sure they are secure," Obama, who is traveling in Asia, told Fox News in an interview.