Despite the shift, the White House said it hadn't taken an official position on Israeli settlements, saying it would wait until Trump meets with Netanyahu later this month to formally develop a position.
"While we don't believe the existence of settlements is an impediment to peace, the construction of new settlements or the expansion of existing settlements beyond their current borders may not be helpful in achieving that goal," White House press secretary Sean Spicer said in a statement.
"The Trump administration has not taken an official position on settlement activity and looks forward to continuing discussions, including with Prime Minister Netanyahu when he visits with President Trump later this month," Spicer said.
Secretary of State Rex Tillerson spoke with Netanyahu Thursday, the State Department said. Tillerson "stressed America's steadfast commitment to its key allies and partners as it works to protect the interests and safety of the American people," a State Department statement said, adding that Tillerson also spoke with his German, Mexican and Canadian counterparts.
It was not immediately clear if Tillerson spoke with Netanyahu before or after the White House's statement on settlements, though the White House statement was issued during the middle of the night in Israel.
Netanyahu is due at the White House for talks on February 15. Israel announced a large new expansion of projects shortly after Trump was sworn in.
In response to a request for comment from CNN on the White House statement, the Israeli Prime Minister's Office issued its own statement: "Prime Minister Netanyahu looks forward to his meeting with President Trump on February 15th in which they will speak about a wide range of issues, including (settlements)."
Trump lambasted the previous administration for allowing a United Nations Security Council resolution to pass that condemned Israel's settlements. The move drove a wedge between the incoming and outgoing administrations during the transition period after Trump spoke out vocally against the resolution.
Shortly after taking office, Trump spoke with Netanyahu in a conversation that both sides described as warm.
Israel since then has announced new plans to establish a settlement in the West Bank, replacing the illegal Amona construction that was demolished this week.
The new settlement would be the first in almost 20 years in the West Bank,
and the creation of thousands of homes in the area is seen as an attempt by Netanyahu to appease his right-wing base in the wake of the evacuation of the Amona outpost.
President Barack Obama was sharply critical of settlement activity, a stance that caused friction between himself and Netanyahu. Trump, meanwhile, has signaled a more tolerant view, naming a US ambassador to Israel, David Friedman, who supports an expansion of settlements.