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The upgrade, approved overwhelmingly, fell short of full U.N. membership, which only the Security Council can grant. But it has significant legal implications because it could allow the Palestinians access to the International Criminal Court where they could file complaints against Israel.
Israel’s settlement plans, widely seen as retaliation for the Palestinians’ U.N. bid, have drawn strong international condemnation from the United States, France, Britain and the European Union.
“The recognition of Palestine as a state changes a lot of the facts, and aims to establish new ones,” Palestinian President Mahmoud Abbas told a cheering crowd in the West Bank city of Ramallah on his return from the United States.
“But we have to recognise that our victory provoked the powers of settlement, war and occupation.”
Netanyahu heads a pro-settler government and opinion polls predict his Likud party will come out on top in Israel’s Jan. 22 parliamentary election, despite opponents’ allegations that his policies have deepened Israeli diplomatic isolation.
“All settlement construction is illegal under international law and constitutes an obstacle to peace,” the EU’s foreign policy chief Catherine Ashton said in a statement on Sunday.
The United States said the plan was counterproductive to any resumption of direct peace talks, stalled for two years in a dispute over settlement expansion in the West Bank and East Jerusalem, both captured by Israel in a 1967 war.
Netanyahu says Israel, as a Jewish state, has a historic claim to land in the West Bank and to all of Jerusalem. Palestinians want East Jerusalem as the capital of a future state. Israel considers all of the holy city as its capital, a claim that is not recognised internationally.
Israeli Housing Minister Ariel Attias said that within weeks the government would publish invitations for bids from contractors to build 1,000 homes in East Jerusalem and more than 1,000 in West Bank settlement blocs.
“E1 is in planning, which means sketches on paper,” Attias told Army Radio. “No one will build until it is clear what will be done there.”
The E1 zone is considered especially sensitive. Israel froze much of its activities in E1 under pressure from former U.S. President George W. Bush and the area has been under the scrutiny of his successor Barack Obama.
Benny Kashriel, mayor of the Maale Adumim settlement adjacent to E1, told Army Radio building “will take a year or two”.
Yariv Oppenheimer, head of the Israeli anti-settlement group Peace Now said: “If we build in E1 the two-state vision will truly be history … it is a strategic point that if built, will prevent the Palestinians from having a normal state.”
Approximately 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem.