Expanding Israeli settlements threatens a Palestinian state and U.S.-led peace efforts, French President Emmanuel Macron warned Thursday, as France hosted Arab and European ministers hours after a Gaza cease-fire deal was announced.

Macron hailed the deal as a "great hope" for the region, but said ramped up settlement construction in the occupied West Bank was an "existential threat" to a Palestinian state.

It was "not only unacceptable and contrary to international law" but "fuels tensions, violence, and instability," he said as he presided over the meeting in Paris.

"It fundamentally contradicts the American plan and our collective ambition for a peaceful region."

Israel and Hamas earlier agreed on a Gaza cease-fire deal to free the remaining living Israeli hostages held by the Palestinian resistance group in exchange for Palestinian prisoners, the withdrawal of Israeli forces, governance of Gaza by a transitional committee and its rebuilding.