"Announcements of thousands of new housing units cannot be reconciled with the goal of a two-state solution and risk the collapse of negotiations," AFP quoted him as saying.
Ban called for an end to all new settlements in the West Bank and east Jerusalem but he also condemned rocket attacks from Gaza into Israel and the building of tunnels from the coastal strip into Israel by militants, according to the report.
The Secretary General warned of "increasingly dangerous" tensions between Israel and the Palestinian Authority which could threaten peace talks, AFP reported.
"I am alarmed by the increasingly dangerous situation on the ground. There has been an escalation of violence and incitement," he said.
Ban also urged Hamas, the Islamist organization that controls the Gaza Strip, and Palestinian Authority President Mahmoud Abbas's Fatah faction who rule in the West Bank to overcome divisions in order to boost the peace talks with Israel.
"All parties must act in a responsible way and refrain from actions that undermine the prospects for successful negotiations," he was reported saying.
Israel and the Palestinian Authority agreed to resume peace talks in July following a three-year stalemate.