A Downing Street spokesperson said:
The Israeli Prime Minister, Benjamin Netanyahu, phoned the Prime Minister yesterday to discuss the mutual challenges facing them in 2012.
They discussed prospects for the international economy, especially the importance of achieving stability and competitiveness in the eurozone, and the growing UK-Israeli co-operation in both science and technology.
On Iran, they agreed on the importance of concerted international pressure on Iran to fulfil its international commitments and to address international concerns about its nuclear programme.
Prime Minister Netanyahu briefed the Prime Minister on the talks between Israeli and Palestinian negotiators in Amman. The Prime Minister welcomed the talks, and emphasised the importance of direct negotiations as the only way to achieve a lasting peace based on a secure Israel and a viable Palestinian state. The Prime Minister raised concerns about Israeli settlements in the West Bank and East Jerusalem. He said such settlements were illegal, and that announcements of further building in them were doing real damage both to Israel’s reputation and to prospects for peace.