Israel decided Tuesday to accelerate Jewish settlement building and withhold Palestinian Authority funds, moves likely to further hold up international efforts to revive peace talks.
Israel's move came a day after UNESCO awarded the Palestinians full membership of the U.N. cultural agency, a diplomatic victory for the Palestinian Authority in its push for recognition as a state at the United Nations.
Israel called the UNESCO decision a "tragedy" and the United States said it would stop its funding of the organization.
Israeli Prime Minister Benjamin Netanyahu called for the accelerated construction of some 2,000 housing units, said an official statement released after he convened his cabinet.
The Palestinian presidency said the decision to speed up settlement construction on land where the Palestinians aim to found a state amounted to a decision to "speed up the destruction of the peace process."
Nabil Abu Rdainah, the spokesman for Palestinian President Mahmoud Abbas, also described as "inhumane" the Israeli decision to temporarily withhold funds collected by Israel on behalf of the Palestinian Authority.
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