Israel's ongoing settlement construction is damaging efforts to reach a negotiated peace agreement, visiting German Foreign Minister Frank-Walter Steinmeier said on Monday.

Berlin's top diplomat was in Israel for a 24-hour visit to discuss the peace process which was largely overshadowed by the death at the weekend of Israel's controversial former prime minister Ariel Sharon who was laid to rest on Monday.

Israel on Monday launched two airstrikes on the Gaza Strip, which left a Palestinian child wounded.

"Israeli warplanes targeted two terrorist sites in the center and south of the strip," an Israeli military statement said.

U.S. Secretary of State John Kerry will meet top officials at the Vatican Tuesday to discuss Middle East peace efforts ahead of Pope Francis's first visit to the Holy Land in May.

Kerry's spokeswoman Jen Psaki said he would meet with Secretary of State of the Holy See Pietro Parolin "to discuss foreign policy priorities, including Pope Francis's vocal leadership on the Middle East Peace Process, poverty and humanitarian issues".

An Israeli unit carried out on Monday some road work near the southern town of Rmeish, reported the National News Agency.

It said that the unit, comprised of a bulldozer, Merkava tank, and a number of soldiers, created a makeshift road in the Khillet al-Qatmoun area near the Rmeish border town.

A state memorial for the late Israeli premier Ariel Sharon got under way at the parliament in Jerusalem on Monday in the presence of Israeli and foreign dignitaries.

The ceremony, which was being held in the plaza outside the Knesset, began with the singing of a traditional Jewish memorial prayer, with a funeral to take place later in the day at Sharon's ranch in southern Israel.

Israelis were on Sunday paying their last respects to Ariel Sharon, whose controversial life inspired admiration and provoked revulsion and whose death drew emotional reaction even after eight years in a coma.

Celebrated as a military hero at home, recognized as a pragmatic politician abroad and despised as a bloodthirsty criminal by the Palestinians and the Arab world, the former premier was nothing if not a polarizing figure.

Adel Makki rushed into the street in Beirut's Shatila Palestinian refugee camp Saturday to hand out sweets when he learned of the death of Ariel Sharon, the Israeli leader Palestinians blame for a massacre of hundreds there and in the nearby Sabra camp.

"I was relieved when I found out that Sharon was dead. I think the (eight) years he spent in a coma were punishment from God for the crimes he committed," Makki, age 19, told Agence France Presse.

Palestinians on Saturday hailed the death of former Israeli premier Ariel Sharon, describing him as a "criminal" but regretting that he is now permanently beyond the reach of the law.

Human Rights Watch (HRW) also lamented the fact Sharon was never prosecuted, particularly over his role in the 1982 massacre of hundreds of Palestinians by Israel's Lebanese Phalangist allies in Beirut's Sabra and Shatila refugee camps.

The European Union's foreign policy supremo said Saturday she was "deeply concerned" by what she said were "illegal" Israeli plans for more than 1,800 new settler homes.

"I was deeply concerned to hear the latest announcement by the Israeli authorities to advance settlement plans once more," Catherine Ashton said in a statement.

Ariel Sharon, the former Israeli premier who died on Saturday at 85, leaves behind a controversial political heritage that has yet to be embraced by any of Israel's ideological camps.

Sharon was despised by the left for his unstinting support for the settlement enterprise and for masterminding Israel's disastrous invasion of Lebanon in 1982. He also fell foul of the right for his evacuation in 2005 of all troops and settlers from the Gaza Strip.