Reporting from Jerusalem — After a successful Palestinian bid to join the U.N. cultural agency, UNESCO, Israel said Tuesday that it would retaliate by issuing tenders for about 2,000 new housing units on land it seized during the 1967 Mideast War.
After meeting with his top advisors, Israeli Prime Minister Benjamin Netanyahu said he would order construction of apartments in the Jerusalem area and the West Bank settlements of Gush Etzion and Maaleh Adumim. Officials said about 1,650 units would be built around Jerusalem and the rest in the West Bank.
The government also temporarily suspended payment this month to the Palestinian Authority of about $100 million in tax transfers that Israel collects on behalf of the Palestinians.
Israeli officials said the moves came in response to the Palestinian campaign to seek international statehood recognition from United Nations entities and other international organizations. In a vote Monday, the U.N. Educational, Scientific and Cultural Organization became the first such entity to afford the Palestinians membership as a state.
Israel and the United States have opposed such efforts, saying that Palestinians will end the Israeli occupation and secure statehood only through direct negotiations.
After UNESCO's vote, the U.S. announced that it would suspend payment next month of about $60 million to the cultural agency, in keeping with a 1990s law that bans U.S. financing of U.N. agencies that grant statehood status to the Palestinians.
Palestinians reacted angrily Tuesday to Israel's latest expansion of Jewish housing on land they hope to one day make part of an independent state, calling the move a blow to the peace process.
"This is only an excuse," said Nabil abu Rudaineh, a spokesman for Palestinian Authority President Mahmoud Abbas. "Construction in the settlements did not stop before Palestine became a member of UNESCO and will not stop after that."
He described the decision to temporarily withhold the tax transfers as "theft." The money, which he said Israel is obligated by treaty to pass along, is used to pay salaries for Palestinian security officers and government employees.
The Israeli government has made no final decision about permanently halting the tax transfers. Some in Netanyahu's coalition government warn that such a step might cause the Palestinian Authority to collapse, leaving a political and security vacuum in the West Bank.
Israeli officials said the new housing units would be built in areas that they expect to remain part of Israel under any final peace settlement. Since formal tenders have yet to be issued, actual construction is still years away.
"What we are doing in no way contradicts the desire to move forward on a two-state solution," said an Israeli government official who was not authorized to speak publicly on the issue. "Israel has shown a great deal of restraint only to have the door slammed in our face repeatedly by the Palestinian leadership."
The Palestinians refuse to engage in peace talks until Israel agrees to halt all settlement construction. Palestinian officials vowed Tuesday to continue their international campaign and seek membership in more than a dozen other international organizations in the coming weeks and months.
Their primary goal is full membership in the U.N., which could come up for a vote in the Security Council next week. The U.S. has pledged to veto the Palestinian application.
Special correspondent Maher Abukhater in the West Bank contributed to this report.