Everybody knew that Israel's move to build new settlements in the previously off-limits area outside Jerusalem known as E1 would anger friends and enemies alike. But few probably guessed that it would send European ambassadors fleeing the country. According to a new report from Haaretz, that's exactly what the diplomats from France and Britain are thinking. More specifically, the Haaretz report cites senior  European diplomats who say that the two countries are considering "the unprecedented step of recalling their ambassadors." One told the paper, "This time it won't just be a condemnation, there will be real action taken against Israel."

The sobering news comes just three days after Benjamin Netanyahu's widely publicized and controversial decision to start construction in the 4.6-square-mile E1 zone, a move that many believe will ruin the chances of a two-state solution to the region's conflict. Captured by Israel in the 1967 war, the strip of land connects the Jewish settlement of Maale Adumim to Jerusalem. However, the proposed 3,000 homes built on that land would also cut off Ramallah and Bethlehem from Jerusalem, "making the contiguous Palestinian state endorsed by the United Nations last week virtually impossible," according to The New York Times. It also makes a single contiguous Palestinian state impossible. Along with another recently announced settlements to be built in Ramot and Pisgat Zeev and a stretch of land known as Givat Hamatos -- 3,810 units total -- Israel is embarking on the biggest settlement construction spree since the 1970s.

France and Britain are obviously incensed by Israel's behavior, which is widely viewed as Netanyahu's tit-for-tat response to Palestine's recent victory in the United Nations. It's not just the settlement decision but also how it came about. As the Haaretz report explains, the two countries " are reportedly angry because they view Israel as having responded ungratefully to the support the two countries gave it during the recent Gaza operation." They also said that the settlement move crossed a "red line." Britain's Foreign Secretary William Hague said that the settlements were "illegal under international law and undermine trust between parties."

The United States isn't exactly thrilled about the situation, either. On Friday, Secretary of State Hillary Clinton said, "These activities set back the cause of a negotiated peace." That statement will sound a little redundant if you heard Clinton's comments after the United Nations approved Palestine's bid for upgraded "nonmember observer state" status. She also said that was "a step that will not bring us any closer to peace" and that Palestinian President Mahmoud Abbas "took a step in the wrong direction this week."

So the optimistic picture here is that everybody is backpedaling away from peace. That's only optimistic because the alternative would be that they're marching towards war, war that nobody really wants. If it takes France and Britain running home to prove that, they will.

UPDATE: France and Britain have now summoned their respective Israeli ambassadors in London and Paris to discuss the matter with their foreign ministers.