Ban was in the West Bank city of Ramallah where he met Palestinian prime minister Rami Hamdallah, a day after a Cairo conference at which international donors pledged USD 5.4 billion to rebuild the war-ravaged Gaza Strip.
"The amount that has been committed, pledged by the international community is quite encouraging," Ban said at a joint news conference with Hamdallah.
The funds would go towards the "urgently needed" reconstruction of infrastructure and homes, he said, referring to an "unprecedented" level of destruction in Gaza where nearly 2,200 Palestinians were killed in the 50-day war in July and August.
"We must give renewed attention to the West Bank.
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"I once again strongly condemn the continued settlement activity by Israel," the UN chief said, echoing international condemnation of plans for new settler homes on occupied Palestinian territory.
The White House and European Union have slammed Israel's approval in September for 2,600 new settlement units in Israeli-annexed Arab east Jerusalem.
The settlements issue has caused the breakdown of numerous rounds of Israeli-Palestinian peace talks.
"I am also deeply concerned by repeated provocations at the holy sites in Jerusalem. These only inflame tensions and must stop," Ban said.
The site is holy to both Jews and Muslims, and is an underlying cause of Israeli-Palestinian tension, which has heightened in Jerusalem since the Gaza conflict.
Ban called for the two sides to revive a stagnant peace process that collapsed in April despite intense US efforts.
"I urge Palestinians to show courage and continue engaging in the... Peace process... (and) Israelis to do the same," Ban said.