JERUSALEM - The United States faced stiff international and Palestinian criticism Tuesday over its decision to no longer consider Israeli settlements illegal, while the Jewish state's premier cheered on the "historic" move.

The United Nations and European Union stressed the decision would not change the reality that the settlements were illegal, while the Arab League condemned the unilateral move announced Monday by US Secretary of State Mike Pompeo.

Pompeo said that after legal consultation Washington had concluded the establishment of settlements was "not, per se, inconsistent with international law", saying he trusted the Israeli courts to decide.

The decision puts the US at odds with virtually the whole of the rest of the international community and breaks with Security Council resolutions declaring settlements to be illegal as they are built on occupied Palestinian land.

Israeli courts, however, have declared most major settlements legal.

The United Nations High Commissioner for Human Rights said the US decision did "not modify existing international law, nor its interpretation by the International Court of Justice and the UN Security Council".

The EU reiterated it still considers all settlement activity illegal.

The announcement is the latest in a series of pro-Israeli moves by Trump's administration, including recognizing the disputed city of Jerusalem as Israel's capital.

Analysts say it will further embolden the settlement movement and may fend off potential legal moves against Israel.

The Arab League called it an "extremely adverse development".

The Palestinian Authority -- which considers the US biased and has rejected the Trump administration as a mediator if peace talks are ever revived -- called for an emergency meeting of the body.

The only two Arab states to have signed peace treaties with Israel -- Egypt and Jordan -- also sharply criticized the US policy shift, with Jordanian Foreign Minister Ayman Safadi warning of "dangerous consequences".

Palestinian chief negotiator Saeb Erekat said they would take a series of measures to oppose it, including calling for a UN Security Council debate.

"We are going to the (UN) General Assembly and we will ask... the International Criminal Court (ICC) to open an official judicial investigation," he added. -AFP