The Middle East peace process has “stalled” ahead of the Israeli general election later this month, Foreign Secretary Philip Hammond has said.

He admitted the British Government was disappointed with the extent of progress made in 2014 and urged all parties to be ready to continue in earnest after the poll.

Mr Hammond told MPs: “I have to be candid with you. Progress has stalled pending the Israeli general election on 17th March.

“The British Government strongly supported US Secretary of State John Kerry’s effort to reach a final status agreement. We were disappointed the parties did not make more progress in 2014.

“I have discussed many times with Secretary Kerry … what the next steps are going to be. We will press the US to revive the initiative and all the parties to resume serious negotiations as soon as possible after the Israeli elections.

“I urge them to be ready then to step up and show the bold political leadership that will be necessary.”

During his visit to the Middle East, Foreign Secretary Philip Hammond met the Prime Minister of Israel.

During his visit to the Middle East, Foreign Secretary Philip Hammond met the Prime Minister of Israel.

Former Liberal Democrat leader Sir Menzies Campbell said the continual encroachment by the Israeli government made it impossible for East Jerusalem to become the capital of a Palestinian state.

He asked Mr Hammond whether he could conceive of any circumstances in which a leader of the Palestinians would accept a peace arrangement based on giving up East Jerusalem.

Mr Hammond replied: “I think that is highly unlikely … The Government’s position is that that should not be the case.

“Settlements are just buildings … buildings can be built, buildings can be removed. We mustn’t allow illegal building to stand in the way of a sustainable solution if it can otherwise be found.”

SNP MP Angus Robertson (Moray) asked the Foreign Secretary if Tony Blair was still a peace envoy to the Middle East.

Mr Hammond confirmed he was, but added: “I have no doubt his role will be kept under constant review.”