Israeli plans to build 900 new homes in Jerusalem’s Gilo neighborhood, constructed beyond the city’s 1967 borders, could have “dangerous” consequences, President Barack Obama said.

Obama said “additional settlement building does not contribute to Israel’s security,” according to a transcript of an interview he gave Fox News. “I think it makes it harder for them to make peace with their neighbors, I think it embitters the Palestinians in a way that could end up being very dangerous.”

The Obama administration has called on Israel to halt all construction in the West Bank. Gilo was built on land Israel captured from Jordan in the 1967 Middle East war and later annexed as part of its capital, a move never internationally recognized.

Obama’s comments were some of the harshest made by a U.S. president regarding Israeli construction over the 1967 borders. “I see this American attitude as a message that we are sick and tired of you,” Alon Liel, former director-general of the Israeli Foreign Ministry, said in a phone interview. “We are losing the diplomatic battle and are heading for a major crisis, especially if negotiations are not resumed with the Palestinians, or with the Syrians.”