"Continued settlement building is deeply unhelpful at this critical moment in the Israeli-Palestinian peace process," he said in a statement Monday. "Such settlements are illegal under international law and pose a serious threat to the realization of the two-state solution to the conflict, based on a viable and contiguous Palestinian territory."
Israeli Prime Minister Binyamin Netanyahu in late October approved the construction of 1,500 housing units in East Jerusalem. The decision came hours after 46 Palestinian prisoners were freed from Israeli custody.
Annan was speaking on behalf of The Elders, a non-governmental group advocating for human rights and global peace.
"Let me emphasize at this point the position of the United States of America on the settlements is that we consider now and have always considered the settlements to be illegitimate," he said in a statement Wednesday.