UN criticizes new settlements

Ban Ki-moon (pictured above) warned Israel Sunday, saying 3,000 new proposed settlement homes would harm the peace process with the Palestinians.

Israel authorized the construction hours after Palestine gained non-member observer status at the UN in a General Assembly vote last week.

'Fatal blow'

The Israeli media have reported some of the new proposed settlements are to be built in E1, a contentious area in the West Bank on the eastern edge of east Jerusalem. Such a move would effectively split the West Bank in two.

A statement from Ban's spokesman said "it was with grave concern and disappointment" that the secretary general learned of the proposed construction.

"This would include reported planning in the so-called E1 envelope, which risks completely cutting off east Jerusalem from the rest of the West Bank," the statement read. "Settlements are illegal under international law and, should the E1 settlement be constructed, it would represent an almost fatal blow to the remaining chances of securing a two-state solution."

Abbas returns to Ramallah

Last week, Palestine secured non-member state observer status at the UN, winning a 138-9 vote in the United Nations General Assembly. Israel and the US opposed to the move. Germany was among 41 countries to abstain.

Palestinian Authority President Mahmoud Abbas returned to the West Bank Sunday after the vote and spoke to a cheering crowd gathered outside the presidential complex in Ramallah.

"Yes, now we have a state," Abbas told the crowd. "Palestine has accomplished a historic achievement at the UN.”

Israel said Sunday it would withhold tax and tariffs collected for the Palestinian territories in response to the UN upgrade.

Funds confiscated

Finance Minister Yuval Steinitz on Sunday said he had "no intention of transferring taxes due to the Palestinian Authority this month."

"We said from the beginning that the raising of the status of Palestine at the UN would not produce no reaction from Israel," Steinitz said at the beginning of a weekly cabinet meeting.

A total of 460 million shekels (92.7 million euros, $121 million) will be confiscated, and instead used to pay off debts the Palestinian Authority owes to the Israel Electric Corp. for power supplied by the country.

Israel transfers tens of millions of dollars every month in customs duties which are levied on goods destined for Palestinian markets but travel through Israeli ports. Those funds make up a large percentage of the Palestinian budget.

Israel had announced that it would react harshly if Palestine moved forward with the vote. Prime Minister Benjamin Netanyahu called Palestine's appeal to the UN a "blatant violation of agreements signed with the government of Israel."

Israel's Cabinet also announced that it was rejecting the UN's upgrade of Palestine, saying it would not form a basis for negotiations between the two sides. The Cabinet said the UN could not change the status of what it called "the disputed areas," a reference to the West Bank.

dr/msh (dpa, AP, AFP, Reuters)