A senior figure in a prominent pro-Israel group has spoken out about Prime Minister Benjamin Netanyahu's plans to expand existing settlements in East Jerusalem.

Lord Monroe Palmer, vice president of the Liberal Democrats Friends of Israel, said that Israel was "aggravating some of its friends as well as giving ammunition to its enemies" by approving construction of 1,060 new houses in Ramat Shlomo and Har Homa.

"Sadly, the announcement this week for more than 1,000 new homes outside of the '67 borders in East Jerusalem doesn't make friends and influence people outside Israel and the Friends of Israel," he said.

Lord Palmer, who was made a life peer in 2011, added: "In the light of all the people ranged against Israel at the moment, it adds fuel to our enemies' fire."

The Jewish peer accused Israel of not living up to its standards, saying: "Some things our enemies say have some truth. I have the great belief that Israel should be more moral than other countries, and not make the mistakes that others do."

Lord Palmer's comments reflect those of Justice Minister Tzipi Livni, who said on Sunday that the government's announcement would have a negative impact on Israel's global standing.

"Plans for more construction, even if it's in the settlement blocs, under such sensitive circumstances that we find ourselves in, are irresponsible from both a diplomatic and security standpoint," she said.