According to the ministry's statement, Moscow believes Israel's move does not help create the conditions for establishing direct negotiations between Israelis and Palestinians.
"It is also clear that the continuation of Israeli settlement activities undermines the prospects of a two-state solution to the Palestinian-Israeli conflict, reducing the chances of achieving a just and reliable peace in the Middle East," it added.
It said Russia confirmed its "principled position" on the illegality of Israeli settlement activity in the Palestinian territories, including East Jerusalem.
Israel on Thursday approved the construction of hundreds of new housing units for Jewish settlers in the occupied West Bank.
According to the Israeli anti-settlement group Peace Now, Israeli officials last year approved the construction of 6,742 new settlement units in the West Bank and East Jerusalem -- the highest number since 2013.
Some half a million Israelis currently live on more than 100 Jewish-only settlements built since Israel occupied the West Bank and East Jerusalem in 1967.