Ahmed Aboul Gheit said an Arab League request to the U.N. may come next month.
"If Israel does not respect the settlements freeze," Gheit said, "the Arab League will study some other option aside from the peace process such as going to the United Nations and ask for the recognition of the Palestinian state."
Gheit spoke as he arrived at a Friends of Democratic Pakistan meeting in Brussels. The group is made up of two dozen nations and international institutions committed to stabilize Pakistan with long-term economic support.
U.S.-sponsored, Israeli-Palestinian peace talks resumed last month after a hiatus of nearly two years. But they already have run aground over Israel's refusal to renew a moratorium on West Bank settlement construction.
On Thursday night, Israel's government said it has approved the building of 238 homes in Jewish neighborhoods in east Jerusalem, ending a nearly yearlong, unofficial freeze on new building there.