UNITED NATIONS, June 23 (Reuters) - UN Secretary-General Ban Ki-moon criticized Israeli municipal authorities on Wednesday for pressing ahead with a plan to raze Palestinian homes in East Jerusalem, calling it unhelpful and illegal.

The Secretary-General is deeply concerned about the decision by the Jerusalem municipality to advance planning for house demolitions and further settlement activity in the area of Silwan, Ban's press office said in a statement.

The planned moves are contrary to international law, and to the wishes of Palestinian residents.

Israeli municipal authorities moved ahead on Monday with plans to demolish 20 Palestinian homes in East Jerusalem, risking more U.S.-Israeli friction over a building project seen by Palestinians as settlement expansion.

Ban's statement appeared to confirm that the Jerusalem city planning board's decision would lead to renewed diplomatic pressure on Prime Minister Benjamin Netanyahu.

Earlier this week, Netanyahu bowed to world calls to ease a Gaza blockade after Israel's deadly raid on an aid flotilla.

The Secretary-General reminds the Israeli government of its responsibility to ensure provocative steps are not taken which would heighten tensions in the city, Ban's statement said.

The current moves are unhelpful, coming at a time when the goal must be to build trust to support political negotiations. (Editing by Brian Winter)