The Vatican speaks in favour of Palestinian Muslims against US recognition of illegal Israeli settlements
Without naming the US, the Holy See said in a statement that "recent decisions ... risk undermining further the Israeli-Palestinian peace process and the already fragile regional stability."
"The Holy See reiterates its position of a two-state solution for two peoples, as the only way to reach a complete solution to this age-old conflict," the Vatican said.
On Monday, US Secretary of State Mike Pompeo announced that the Israeli settlements were "not, per se, inconsistent with international law," breaking with UN Security Council resolutions declaring the settlements to be illegal as they are built on occupied Palestinian land.
The policy shift puts the US at odds with virtually the whole of the rest of the international community, and criticism came on Tuesday from the European Union, the United Nations and the Arab League.
Courts in Israel have declared most major settlements legal.
More than 600,000 Israelis live in settlements in east Jerusalem and the West Bank, alongside more than three million Palestinians. The settlements remain one of the thorniest issues in the decades-long Israeli-Palestinian conflict.
The Holy See said it supported Israel's right to live in peace and security within the borders that are recognised by the international community, and supported "the same right that belongs to the Palestinian people, which must be recognised, respected and implemented."
Israel has welcomed the US decision, with Prime Minister Benjamin Netanyahu saying he was "very moved" by Pompeo's announcement.
US President Donald Trump's administration had "corrected an historic injustice and lined up with truth and justice," Netanyahu said.
Pope Francis, who arrived on Wednesday in Thailand ahead of a visit to Japan, has not himself directly addressed the issue. - APP/AFP