The UN secretary general has met Palestinian leaders at the beginning of a mission to press for a resumption of talks between them and the Israelis.
Ban Ki-moon's first stop was in the West Bank town of Ramallah, where he met PM Salam Fayyad. He is to see the Israeli president Shimon Peres later.
Israel's controversial plan to build 1,600 more homes in East Jerusalem has provoked the latest round of diplomacy.
The Palestinian leadership has said the plan is an obstacle to resuming talks.
It has been strongly criticised by the Quartet of the US, Russia, the EU and the UN.
Israel announced last week it had granted permission for the new homes in the Ramat Shlomo area of East Jerusalem, occupied by Israel since 1967.
During his visit to Mr Fayyad, he was escorted to a West Bank observation point on the outskirts of Ramallah to see the Israeli West Bank settlement of Givat Zeev, home to 11,000 Israelis.
Mr Ban reiterated the UN's stance on the settlements.
"The world has condemned Israel's expansion plans in East Jerusalem.
"Let us be clear: all settlement activity is illegal anywhere in occupied territory, and this must stop.
"The Quartet has re-affirmed this, that position. I'm also concerned about actions in Hebron, Jerusalem, and elsewhere.
"I urge all parties to respect sensitivities and promote calm."
Mr Ban has stated the goal of an Israeli-Palestinian peace agreement - including a Palestinian state - within two years.
The last time Mr Ban came to Israel was in the immediate aftermath of Israel's military operation against Gaza 14 months ago.
Weekend diplomacy
Then he did not hide his anger over the high human cost of that operation, and there may be strong words from Mr Ban this time over Israel's refusal to halt the construction of settlements, the BBC's Jonathan Head says in Jerusalem.
On Sunday the US special representative George Mitchell will also visit the region to try to get the so-called proximity talks going between the Israelis and Palestinians.
Israeli Prime Minister Benjamin Netanyahu is to travel to Washington where he is expected to meet Secretary of State Hillary Clinton and possibly President Barack Obama.
Speaking to the BBC earlier, Mrs Clinton indicated that hardening the tone with Israel had paid off, with talks now back in prospect.
"I think we are going to see the resumption of the negotiating track, and that means that is paying off, because that is our goal," she said.
Israeli strikes
The diplomatic efforts come as at least 11 people were injured by Israeli air strikes targeting Gaza's airport, Palestinian officials say.
The Israeli military confirmed the missile strikes near Rafah, in southern Gaza, which it said targeted militants.
It was the second night of Israeli raids since a rocket fired from the Gaza Strip killed a worker on an Israeli farm on Thursday.
Friday's missiles hit Gaza's long disused international airport and tunnels dug by militants near the border with Israel.
On Thursday, Israeli missiles hit smuggling tunnels and a metal workshop in Gaza, but there were no reports of serious injuries.
An Israeli military spokesman said the strikes were a response to five rockets fired at Israel from Gaza in the past two days - including one that killed a farm worker from Thailand in a kibbutz in southern Israel.
He was the first person to be killed by rocket fire in southern Israel since the Israeli campaign in Gaza last year.
