Israel says wont backtrack on settlement plan despite intl pressure ...

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Britain is considering recalling its ambassador to Israel to protest at Prime Minister Benjamin Netanyahu's decision to expand settlement building, a diplomatic source said on Monday.

Israel's Haaretz newspaper had reported that France was also considering withdrawing its envoy.

Both embassies declined to comment on the reports, but the British issued a statement saying they had made clear they would not support strong Israeli retaliation to a UN vote last week that gave the Palestinians de facto recognition of statehood.

"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," the British embassy in Tel Aviv said.

Such a move by both London and Paris would represent a severe diplomatic reproach to Netanyahu. Israel's Vice Prime Minister Moshe Yaalon told Israeli Army Radio he was not aware of any recall.

French President Francois Hollande said on Monday he did not want to start imposing sanctions on Israel after it announced plans to expand settlement building in occupied territories.

"We don't want to shift into sanctions mode," Hollande said at a news conference with Italian Prime Minister Mario Monti. "We are more focused on convincing."

Also in this context, Sweden has summoned the Israeli ambassador in Stockholm to a meeting, the foreign ministry said on Monday, as governments across Europe acted to express concern over Israel's plans to expand Jewish settlements on occupied land.

On the other hand, German government spokesman said that Germany urges Israel to refrain from expanding settlements, adding that Germany still expects Netanyahu to visit the country this week for scheduled bilateral talks.

However, an official in Prime Minister Benjamin Netanyahu's office said on Monday said that Israel will not backtrack on a settlement expansion plan that has drawn strong international condemnation, .

"Israel will continue to stand by its vital interests, even in the face of international pressure, and there will be no change in the decision that was made," the official said.

Besides authorizing 3,000 new homes in and around Jerusalem, the Israeli government also agreed to expedite planning work for thousands more homes on barren land near Jerusalem that critics say would kill off Palestinian hopes of creating a viable state.

REUTERS