The White House has dismissed speculations that the US is considering economic sanctions to force Israel into freezing its West Bank settlement activity.

State Department spokesman P.J. Crowley said on Thursday that a remark made by deputy spokesman Robert Wood on Wednesday had been misinterpreted.

"We are not contemplating such action," said Cowley, highlighting the need for all the parties involved to resolve all issues "through peaceful negotiations."

When asked about the possibility of US financial pressure on Israel on Wednesday, Wood said it was "premature to talk about that," raising a speculation that Washington might be weighing such an option.

Israel has faced strong opposition from US President Barack Obama's administration over its planned construction of some 20 'Jewish-only' apartments in the Shepherd Hotel, in East Jerusalem's Sheikh Jarrah neighborhood.

The US has also issued a stiff warning to Israel against building settlements in an area known as E-1, which lies between Jerusalem (al-Quds) and the West Bank settlement of Ma'aleh Adumim, saying any change in the status quo in E-1 would be "extremely damaging" and even "corrosive".

MRS/MMN