Palestinian Authority officials cried foul on Tuesday after reports circulated saying Israel would levy sanctions, the PA's semi-official Maan News reported.
Prime Minister Benjamin Netanyahu convened a cabinet meeting with his eight senior ministers on Tuesday evening to discuss imposing sanctions on the cash-strapped PA following the unilateral moves by PA chairman Mahmoud Abbas at the United Nations.
It was decided at the meeting to freeze funds normally transferred to the PA under existing bilateral agreements, and to accelerate construction in Jerusalem, Gush Etzion, and Maale Adumim.
The meeting of senior Israeli ministers came just days after UNESCO voted to admit the PA as a full-member state - and PA official's stated intent to join no fewer than fifteen other UN organizations.
“The Israeli decision to speed up settlement construction with the construction of 2,000 new housing units is an Israeli decision to accelerate the destruction of the peace process,” presidential spokesman Nabil Abu Rudeina told AFP.
Abbas advisor Namir Hammad told Maan that Israeli sanctions were "a clear violation of international conventions and initiatives," and proof that Israel is not serious about peace.
Both Israel and the US maintain PA moves at the world body are a direct violation of the 1993 Oslo Accords - signed by Israel, the US and the PA - which creates a bilateral framework for solving problems and forbids unilateral moves. The Oslo Accords mandate the PA's very existence.
But Hammad insisted "the US, must realize that establishment of a Palestinian state serves US interests as much as it serves Ramallah's interests."
"Stability in the region depends on the establishment of a Palestinian state," he argued.
Hammad also claimed the Israeli government was pretending to be unaware of the ongoing changes in the Arab world after the Arab Spring, a radicalization which led to the people's control of decision-making in three countries so far.
“They seem to be unaware that Israel will not be able to count on the US exerting pressure on one Arab leader or another to make their decisions contingent on Israel’s wishes,” Hammad said.
Contrary to Hammad's claims, US pressure on Cairo has been instrumental so far in reducing tensions between Cairo and Jerusalem, and ensuring the 1979 Egypt-Israel Peace Treaty has been maintained.
Nor, international analysts say, do the billions of foreign aid dollars the Obama administration has extended to new regimes in Arab states come without strong diplomatic strings attached.
Israeli officials maintain all contacts and cooperation between Jerusalem and Ramallah – Including economic, political, security, and critical infrastructure – are mandated by the accords PA officials are now violating.