BERLIN- The German government is extremely concerned about Israeli plans to build more settlements in occupied territory in response to the inauguration of a Palestinian unity government backed by Hamas Islamists opposed to the Jewish state's existence.

"The German government is very worried about this report because this step poses the threat of making efforts to continue peace negotiations between Israel and the Palestines even harder," German government spokeswoman Christiane Wirtz said.

She called on both sides to avoid provocative steps and said the German government urged the Israeli government to refrain from inviting bids to construct homes.