Breaking: Britain denies it will recall its ambassadordenying reports that it intends to recall its ambassador to Israel, Matthew Gould.
The UK has summoned Israel's ambassador in London over the plans to expand settlement building in the occupied Palestinian territories.
The Foreign Office warned of a "strong reaction", but dismissed reports that the British ambassador in Tel Aviv could be withdrawn, as "speculation".
The government said Mr Burt would "set out the depth of the UK's concern about decisions concerning all settlement building".
A Foreign Office spokesman said: "The Foreign Secretary [William Hague] has consistently made it very clear that settlement building, such as the recent Israeli government decision to build 3,000 new housing units, threatens the two-state solution and makes progress through negotiations harder to achieve.
"We have called on the Israeli government to reconsider. We have told the Israeli government that if they go ahead with their decision, then there will be a strong reaction."It sounds like this is going to calm down. E-1, which is what set them off, is likely years away from actual construction.
What could go wrong?