The Israeli government is facing international condemnation for a proposal for 3,000 new settlements in the occupied West Bank and east Jerusalem.
The announcement is being seen as retaliation for the United Nations vote to upgrade the status of Palestine as a recognised non-member state.
Also of particular concern are the threats by Israel that it will withhold money due to the Palestinian Authority because of the UN vote on Palestinian statehood.
Restrictions on movement of goods and people by Israel have already put a stranglehold on the Palestinian economy and forced many Palestinians into dependence on humanitarian aid.
France, the UK and even the US have condemned the proposed settlement move, and it has also been condemned by campaigners for a just peace in Israel and Palestine, including Jewish human rights groups.
French Foreign Minister Laurent Fabius declared today (1 December): "I call on Israeli authorities to refrain from any decision to that effect and to clearly show their willingness to restart [peace] negotiations."
He continued: "If confirmed, this decision... would create a serious obstacle to a two-state solution, by undermining the territorial contiguity of a future Palestinian state... It would take away the trust needed to resume dialogue."
UK Foreign Secretary William Hague has said that the settlement plans undermine Israel's position, and has "strongly advised" the Israeli Government to reverse its decision.
"The UK's approach to the Palestinian resolution at the UN General Assembly was guided by the principle of how to create the right environment for a swift return to talks and the strongest possible foundation for the peace process," a Foreign and Commonwelath Office statement says.
Meanwhile, reacting to the historic United Nations General Assembly vote on Palestine, the International Criminal Court's prosecution office said on 30 November that it "will consider the legal implications of this resolution."
In April this year, ICC prosecutors rejected a Palestinian bid to get the Hague-based court to investigate possible war crimes during the Israeli military offensive against Gaza in December 2008. The situation may change now that Palestine is a recognised state, albeit outside UN membership at present.
* Palestine upgrade 'brings obligations under international law' - http://www.ekklesia.co.uk/node/17505