The White House said that building new Israeli settlements or expanding existing ones "may not be helpful" in securing Middle East peace.
“While we don’t believe the existence of settlements is an impediment to peace, the construction of new settlements or the expansion of existing settlements beyond their current borders may not be helpful,” said spokesman Sean Spicer.
The statement is a break from Trump’s previously full-throated defense of Israeli settlement building.
Since Trump came to office Israel has approved a slew of new construction in existing settlements, the type of act that critics say risks making a two-state solution impossible.
Israel recently unveiled plans for 3,000 new homes for Jewish settlers in the occupied West Bank, the fourth such announcement in the less than two weeks since Trump took office.
“The Trump administration has not taken an official position on settlement activity and looks forward to continuing discussions, including with Prime Minister Netanyahu when he visits with President Trump later this month,” Spicer said.
Trump is scheduled to welcome Israeli Prime Minister Benjamin Netanyahu to the White House on February 15.
Settlements in both the West Bank and east Jerusalem are viewed as illegal under international law and major stumbling blocks to peace as they are built on land the Palestinians want for their own state.
While former president Barack Obama grew frustrated with Israeli settlement building and declined to veto a December 23 UN Security Council resolution condemning settlements, Trump had called for the resolution to be vetoed.
The Republican president has moved quickly to befriend Israel’s prime minister, and the pair spoke by telephone on Sunday.
“As the president has expressed many times, he hopes to achieve peace throughout the Middle East region,” Spicer said.
Trump has previously stated that his son-in-law Jared Kushner would play a role in trying to negotiate peace.
The idea of an Israeli and a Palestinian state coexisting has underpinned peace efforts for decades.
The president has also said he plans to move the US embassy in Israel from Tel Aviv to Jerusalem — a measure that the Palestinians have fiercely condemned.
If the US embassy is moved to Jerusalem, it would break decades of US policy and be at odds with the overwhelming majority of other nations, which believe the status of Jerusalem must be resolved through negotiation.
Trump has also come under fire for failing to specifically mention in his Holocaust remembrance statement on Friday the six million Jews killed in the Nazi genocide.