The United Nations Security Council is due to vote on a draft resolution that would demand Israel “immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem”.
Egypt circulated the draft late on Wednesday and a vote was scheduled for 3pm (20:00 GMT) on Thursday.
Israeli settlements are illegal under international law and seen as major stumbling block to peace efforts as they are built on Palestinian land occupied by Israel.
The Palestinians want an independent state in the West Bank, Gaza and East Jerusalem, areas Israel captured in a 1967 war.
Israel disputes that settlements are illegal and says their final status should be determined in any future talks on Palestinian statehood.
The UN maintains that settlements are illegal and has repeatedly called on Israel to halt them, but UN officials have reported a surge in construction over the past months.
A resolution needs nine votes in favour and no vetoes by the United States, France, Russia, Britain or China to be adopted. A similar resolution was vetoed by the US in 2011
Wednesday’s draft text says the establishment of settlements by Israel has “no legal validity and constitutes a flagrant violation under international law”.
It also states that Israeli settlements are “dangerously imperiling the viability of the two-state solution” that would see an independent state of Palestine co-exist alongside Israel.
The text stresses that halting settlements was “essential for salvaging the two-state solution, and calls for affirmative steps to be taken immediately to reverse the negative trends on the ground”.
UN diplomats see the resolution as a final chance for council action on the Middle East before Republican President-elect Donald Trump succeeds Democrat Obama on January 20