The appeal came after Israel declared 234 hectares of West Bank territory to be state land, fueling concerns of a new spike in tensions with the Palestinians.
"Such actions appear to point toward an increase in settlement activities and demonstrate that Israel is continuing to push forward in the consolidation of its control of the West Bank," said UN spokesman Stephane Dujarric.
"Settlements are illegal under international law and the secretary-general urges the government of Israel to halt and reverse such actions in the interest of a just and comprehensive peace and a just final status agreement," he said.
Earlier this month, the UN humanitarian coordinator for the Palestinian territories, Robert Piper, said Israel was razing Palestinian homes at an "alarming" rate in the West Bank.
Peace Now, an organization that monitors settlements, said the order to seize the land was signed on March 10 as US Vice President Joe Biden wrapped up a visit to Israel and the Palestinian territories.
"This declaration is a de-facto confiscation of Palestinian lands for the purpose of settlement," it said in a statement.
"Instead of trying to calm the situation, the government is adding fuel to the fire."
There has been a wave of violence including a shooting attack and a car-ramming on Israelis in the West Bank this week.
The three Palestinians who carried out the attacks yesterday were shot dead by Israeli soldiers.
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