She told Israeli PM Benjamin Netanyahu by telephone that the move was "deeply negative" for US-Israeli relations.
Since then the Palestinians have indicated they will not return to the negotiating table unless the Israeli decision is revoked.
"The secretary said she could not understand how this happened, particularly in light of the
"She made clear that the Israeli government needed to demonstrate not just through words but through specific actions that they are committed to this relationship and to the peace process."
The Quartet of Middle East peace mediators - the
Mr. Netanyahu earlier apologized for the timing of the settlement announcement, which was made as Mr. Biden was holding a day of talks in
He said he had summoned Interior Minister Eli Yishai to reprimand him.
Israeli and Palestinian leaders had agreed to hold indirect, "proximity talks" in a bid to restart the peace process, which has been stalled for more than a year.
But after the announcement, the Palestinian Authority said talks would be "very difficult" if the plans for the homes were not rescinded.
Close to 500,000 Jews live in more than 100 settlements built since
The latest announcement by the