There is nothing wrong, it is nothing but an honest Windows Update!
I am not a user of avast! products but is there not an option to allow the connection (where the drop-down is to select the action to take)? You can try white-listing the svchost.exe process manually in the settings.
Avast did not detect the svchost.exe (it's a legitimate Windows process in this case..) as malicious but it alerted about the connection the process has because the downloads are not whitelisted by Avast yet... since it is a new Windows Update the file rep picks it up as suspicious
edit: sorry only just read the replies... just try to whitelist the svchost.exe process manually and see if that stops the alerts/block