Israel intends to block a United Nations mission to investigate settlement activity in the occupied territories.
Israel says it will not cooperate with a fact-finding mission of the United Nations Human Rights Council which plans to investigate the effects of Jewish settlements on the civil rights of Palestinians.
Deputy Foreign Minister Danny Ayalon told Israel Radio that the Israeli government will not allow the U.N. delegation to enter the country.
Ayalon said the U.N. council is supposed to protect human rights, but he said this is a "political mission" to condemn Israel and the outcome is known in advance.
At the weekly Cabinet meeting in Jerusalem, Israeli officials expressed outrage at the Palestinian Authority, which sponsored the initiative at the U.N.
Finance Minister Yuval Steinitz said that if the Palestinians wage diplomatic warfare on Israel, it could result in economic sanctions.
Israel is considering a tough measure it has imposed in the past: withholding hundreds of millions of dollars in tax revenues from the Palestinian Authority.
The Palestinians say United Nations action is necessary because Israeli settlement policy in the West Bank is destroying the prospects for a two-state solution.
"Israel is undermining chances for peace and for the resumption of negotiations. Israel has to freeze settlements in order for fruitful, constructive, negotiations to be resumed," Riyad al-Maliki, Palestinian Foreign Minister.
Israel rejects Palestinian demands for a settlement freeze and says peace talks should resume without pre-conditions. International mediators have failed to bridge the gaps, and the dispute over the U.N. mission has only reinforced a three-year deadlock in the peace process.
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