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The Middle East Quartet set a deadline today for a peace deal between Israel and the Palestinians after condemning plans to build new Jewish homes in Jerusalem.

Meeting in Moscow as Israeli jets launched air strikes over the Gaza Strip in retaliation for a Palestinian rocket attack, the international diplomatic mission sought to revive plans for indirect negotiations that collapsed over the decision to build 1,600 homes in the disputed capital.

It set a target of 24 months for a final settlement to the conflict that would create an independent Palestinian state. The group also urged Israel “to freeze all settlement activities…and to refrain from demolitions and evictions”.

In a statement read out by Ban Ki-moon, the UN Secretary-General, the Quartet said that it “condemns the decision by the Government of Israel to advance planning for new housing units in East Jerusalem”.

It demanded an “immediate end to violence and terror” and said that it was “deeply concerned by the continuing deterioration in Gaza including the humanitarian and human rights situation of the civilian population”.

The group also comprised US Secretary of State Hillary Clinton, Russia’s Foreign Minister Sergei Lavrov and the European Union’s foreign policy chief Baroness Ashton of Upholland, as well as Tony Blair, who represents the Quartet in the region.

The leaders gave no details of how they intend to achieve their target. The Palestinians have refused to enter indirect talks until Israel cancels the new settlement plans.

Mr Lavrov told a joint news conference that the Israelis and Palestinians should resume the indirect talks before switching to direct negotiations.

He said: “We emphasised that the circumstances that made it possible to agree upon the start of indirect talks must be honoured. We are convinced that Israel will hear all this and understand.”

Mrs Clinton said that she would meet Binyamin Netanyahu, the Israeli Prime Minister, in Washington next week. She told reporters: “We are all committed to the launching of proximity talks between the Israelis and Palestinians.”

The risk of a fresh cycle of violence was underlined by the Israeli air strike on six targets in Gaza following a Palestinian rocket attack that killed a Thai labourer in an Israeli village.

Lady Ashton was visiting the Palestinian enclave when the militants struck yesterday, the first fatal rocket attack from Gaza since Israel’s offensive against Hamas in January last year.

The al-Qaeda-inspired Ansar al-Sunna Brigade claimed responsibility for the rocket attack, linking it to clashes between Palestinian demonstrators and Israeli police in Jerusalem earlier in the week.

Thousands of Israeli police were on alert today in Jerusalem amid fears of renewed clashes with Palestinians during Friday prayers, following the fighting that broke out in the east of the city on Tuesday.

Mr Netanyahu’s office announced last night that he had discussed “mutual confidence-building measures” between Israel and the Palestinians in a telephone call with Mrs Clinton.

No details were released but Mrs Clinton called Mr Netanyahu’s response “useful and productive”.

George Mitchell, the US Middle East peace envoy, is planning to meet Israeli and Palestinian leaders shortly to try to revive talks. He was present at the Moscow meeting.

Russia had intended today’s gathering to be a full-scale international peace conference on the Middle East. But the deterioration in relations between Israel and the Palestinians meant that Moscow had to settle for a Quartet discussion.