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Britain's Prime Minister Theresa May leaves 10 Downing Street in London, Britain February 1, 2017. REUTERS/Neil Hall


By Kylie MacLellan

LONDON (Reuters) - Prime Minister Theresa May will meet her Israeli counterpart Benjamin Netanyahu for talks in London on Monday, and will set out Britain's position that an increase in Israel's settlement activity undermines trust in the peace process.

Israel said this week it would establish a new settlement in the occupied West Bank, the first since the late 1990s.

The British leader's spokeswoman said the focus of the talks, the first meeting between the two since May took office last year, would be the bilateral relationship, including boosting trade when Britain leaves the European Union.

They will also discuss a range of international and security issues, including the conflict in Syria, the nuclear threat from Iran and the Middle East peace process, the spokeswoman said.

"I would expect the prime minister to set out the government’s position that we think the continued increase in settlement activity undermines trust," she told reporters on Thursday.

"Our focus is on how do we make a two-state solution with an Israel that is safe from terrorism and a Palestinian state that is viable and sovereign, work?"

In December, Britain voted for a UN Security Council resolution demanding an end to Israeli settlement building.

"(May) will also be clear that we realise and recognize that settlements are far from the only problem in this conflict and we understand the position of the Israelis," the spokeswoman said.

U.S. President Donald Trump has signalled he could be more accommodating toward the settlements than his predecessor, and in turn Netanyahu has praised Trump's plans to build a wall on the Mexican border. Netanyahu is due to meet Trump on Feb. 15.

Last week, May became the first foreign leader to meet Trump since his inauguration, and EU allies fear Britain could indulge him by changing its stance on Iran and Israel in the hope of a post-Brexit trade deal.

Trump's team have spoken of moving the U.S. Embassy from Tel Aviv to Jerusalem, Israel's self-proclaimed capital and a holy city at the heart of the Israeli-Palestinian conflict. May's spokeswoman said Britain had no intention of following suit.

She also said May would reiterate her support for the Iran nuclear deal, something Netanyahu and Trump have both often criticised.

"We believe it is vitally important for regional security," she said.

(Additional reporting by William James; editing by Stephen Addison)

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