Israel's Prime Minister Benjamin Netanyahu on Monday slammed the EU's stance on Jewish settlements in the West Bank, saying they would hamper peace talks with the Palestinians.

His criticism came after Israel approved the construction of more than 1,000 new settlement units, in a move which infuriated Palestinians ahead of Wednesday's resumption of peace negotiations.

"I think Europe, the European guidelines by the EU, have actually undermined peace," he said during a meeting with German Foreign Minister Guido Westerwelle.

The EU published guidelines last month that will forbid its 28 member states from dealing with or funding any Israeli "entities" in the occupied Palestinian territories, including the West Bank and east Jerusalem.

Jewish settlements in the West Bank are illegal under international law.

The guidelines "have hardened Palestinian positions," Netanyahu said.

"They seek an unrealistic end that everybody knows is not going to happen, and I think they stand in the way of reaching a solution which will only be reached by negotiations by the parties, and not by an external dictate."

The Palestinians want their future state to be drawn up based on the so-called 1967 lines, which existed before Israel seized the West Bank in the Six-Day War of that year.

Israeli and Palestinian negotiators are due to resume US-brokered peace talks in Jerusalem on Wednesday, nearly three years after the last round broke down over the settlements issue.

Israel approved the release of 26 Palestinian prisoners before talks begin, but on Sunday also gave the green light for more than 1,000 new settler homes to be built in the West Bank and annexed east Jerusalem.

Key Israel-Palestinian prisoner releases
Jerusalem (AFP) Aug 12, 2013 - Here is a timeline of key prisoner exchanges between Israel and Palestinians:

- March 1974: 65 Palestinians are exchanged for two Israelis detained in Egypt for spying.

- March 14, 1979: Israel releases 76 Palestinian militants in return for an Israeli soldier taken prisoner in April 1978 in Lebanon.

- November 23, 1983: More than 4,600 Palestinians are freed by Israel to secure the release of six soldiers captured a year earlier by the Palestine Liberation Organisation (PLO) in Lebanon.

- May 20, 1985: Israel frees 1,150 Palestinian detainees in return for three soldiers captured in 1982 by the Popular Front for the Liberation of Palestine.

- October 1, 1997: Israel frees Hamas spiritual head Ahmed Yassin after eight years in captivity, as well as dozens of Palestinian and Jordanian political prisoners, in exchange for two of its Mossad secret agents.

- August 6, 2003: Israel frees 341 Palestinian detainees.

- January 29, 2004: In a German-mediated deal, Israel frees 400 Palestinians and 31 other people, including 23 Lebanese. Hezbollah hands over an Israeli reservist it has held for three years and the remains of three other soldiers.

- December 27, 2004: Israel frees 159 Palestinians.

- February 21, 2005: Israel frees 500 Palestinians.

- June 2, 2005: Israel frees 400 Palestinians.

- July 20, 2007: More than 250 Palestinians released.

- December 3, 2007: Israel frees 429 Palestinians.

- August 25, 2008: Israel frees 198 Palestinians, including two "with blood on their hands," convicted of deadly attacks. It is the first time such detainees are freed other than as part of an exchange.

- December 15, 2008: Israel frees 227 Palestinians.

- October 2, 2009: Twenty Palestinians freed in exchange for a video of Israeli soldier Gilad Shalit, held since his June 2006 capture by Gaza militants.

- October 18, 2011: Israel and Hamas reach a landmark deal that results in the release of Shalit, along with 1,027 Palestinian detainees in two stages.

- August 11, 2013: Israel agrees to free 26 long-term Palestinian detainees as part of a deal to get peace talks back on track. They are the first of 104 Palestinians to be released depending on progress in the talks, which are to begin on Wednesday.