Foreign Minister Murray McCully has condemned Israel's latest land seizure in the occupied Palestinian territories this week, saying it was "deeply unhelpful" and that New Zealand would talk to others on the Security Council about an appropriate response.

It follows a speech Mr McCully gave in Australia this week saying that the viability of a two-state solution was disappearing because of Israel's settlement activity, which is contrary to international law.

Israel has decided to appropriate 234ha of land in the occupied West Bank near the Dead Sea, its biggest land appropriation since 2014 which could be used for new settlements.

"New Zealand would like to see both sides return to the negotiating table and this latest announcement will only service to push the two parties further apart," he said.


"We will be talking with fellow UN Security Council members about an appropriate response."

In a speech to the Lowy Institute in Sydney this week, Mr McCully expressed deep frustration that the Security Council was not dealing with the Middle East peace process.

It was seven years since it had passed a resolution on the issue.

"The question now looms as a serious challenge to the credibility of the council," he said.

New Zealand was now looking again at a draft text for a new resolution to put before the council.

"For the council to do nothing while the scope for a two-state solution is completely undermined would be a total abrogation of its responsibilities," he said.

Speaking to the Herald from Australia, Mr McCully said New Zealand was consulting other council members including Egypt about a resolution.

"It is one of those areas where we defer to those who are more intimately involved in the neighbourhood but make it clear to council members that we are prepared to do something if they are not."

"It is quite a delicate process of consultation."

New Zealand is in the final year of a two-year term on the Security Council.