"All Israeli settlements in the West Bank, as well as in East Jerusalem, have been established in clear violation of international law," U.N. special envoy Richard Folk said Wednesday.
European banking group Dexia and U.S. real estate company Re/Max were tied to the settlement activity, he told members of the U.N. General Assembly.
Neither company had a public statement Wednesday regarding the United Nations report.
Folk said Re/Max makes no secret about its real estate business in what he said was occupied Palestinian territory. Dexia Group, controlled in part by Belgium and France, was called on to compensate Palestinians adversely affected by the settlement activity.
"Financial institutions and real estate companies may be held criminally accountable for their involvement with illegal settlements in occupied Palestine," he said.
The Jerusalem Post reported Israeli Prime Minister Binyamin Netanyahu approved the construction of 1,500 housing units in East Jerusalem. The decision came hours after 46 Palestinian prisoners were freed Wednesday from Israeli custody.