The United States strongly condemned the Israeli government's decision to advance a plan that would create up to 300 new settlement units deep in the West Bank, the State Department said on Wednesday, saying it would damage prospects for a two-state solution.

"It is deeply troubling, in the wake of Israel and the US concluding an unprecedented agreement on military assistance designed to further strengthen Israel's security, that Israel would take a decision so contrary to its long term security interest in a peaceful resolution of its conflict with the Palestinians," State Department spokesman Mark Toner said in a statement.

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