ISRAEL ORDERS 2000 NEW ILLEGAL BUILDINGS IN EAST JERUSALEM

Binyamin Netanyahu, Israel's prime minister, has ordered the building of 2,000 new housing units for Israelis, mainly in illegally occupied East Jerusalem, an area Palestinians claim as the capital of their future state.

Netanyahu said in a statement on Tuesday that the new construction would include settlements that he believed would be part of Israel in a future peace accord. Israeli settlements built on occupied Palestinian land are considered illegal under international law.

Israel also decided on Tuesday to freeze the transfer of tax revenues owed to the Palestinian Authority, as a punitive measure after Palestine was granted full membership of UNESCO, the United Nations' culture and heritage agency, media reports said.

Saeb Erakat, the former Palestinian chief negotiator, said construction of more housing units was "politically motivated".

"The land they are going to build settlements on is supposed to be the land of the Palestinian state," he told Al Jazeera.

"The money they will withhold is Palestinian money. So this is a policy of intimidation and blackmail and we'll not budge ... we'll continue pursuing our rights."

Erakat added: "The mere fact that Israel defies the international community, by having more settlements instead of cessation of settlement activities and withholding Palestinian money, which is theft in my opinion, just reflects the nature of the Israeli government attempts to continue undermining the two-state solution. What harm does it bring to Israel when Palestinians join UNESCO?"