JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu promised retaliatory measures on Sunday after Palestinian President Mahmoud Abbas made unilateral moves towards statehood.

Israel's Prime Minister Benjamin Netanyahu sits after delivering a statement in Jerusalem November 21, 2012. REUTERS/Baz Ratner

Netanyahu did not immediately specify the action he would take and said Israel remained willing to press on with U.S.-brokered peace talks, but not “at any price”.

“They will achieve a state only through direct negotiations and not through empty proclamations or unilateral moves, which will only push a peace accord farther away,” Netanyahu told his cabinet at its weekly meeting.

On Tuesday, Abbas signed 15 international treaties, including the Geneva Conventions on the conduct of war and occupations, a defiant assertion of statehood that surprised Washington as it was pushing both sides to continue negotiations beyond an April 29 deadline.

Palestinians said the step was a response to Israel’s failure to fulfil its pledge to free some two dozen Palestinian prisoners. Israel said it first wanted a Palestinian commitment to keep talks going beyond the end of the month.

“Unilateral steps on their part will be answered with unilateral steps on our side. We are willing to continue negotiations, but we will not do so at any price,” Netanyahu said.

Some Israeli cabinet members called for economic sanctions against Abbas’s Palestinian Authority which has limited self-rule in the occupied West Bank, a suggestion that angered Chief Palestinian negotiator Saeb Erekat.

“Why are you threatening us as if we are sending suicide bombers to Tel Aviv?” Erekat asked on Israel’s Army Radio.

PHONE MOVE

In a possible first sign of Israel’s measures, the Palestinian telecommunications minister said Israel had told telephone company Wataniya Palestine Mobile it would no longer be allowed to bring equipment into the Gaza Strip, where it plans to operate a network.

An Israeli government spokesman declined comment.

Israel, which restricts the movement of people and goods across the Gaza border, had permitted the company - owned by the Palestine Investment Fund and Kuwait’s National Mobile Telecommunications Co - to send hardware into the territory, run by Islamist group Hamas, after the talks with Abbas resumed in July.

Abbas spokesman Nabil Abu Rdainah said Israel was already taking unilateral steps through its failure to release the prisoners and continued settlement activities in occupied territories Palestinians seek for a state.

Stung by his diplomatic setback, just as a complex deal for the negotiations’ extension was emerging, U.S. Secretary of State John Kerry has said the United States is evaluating whether to continue its role in the talks, accusing both sides of taking unhelpful steps.

U.S. mediator Martin Indyk has been holding further meetings with both sides.

The talks have struggled since they began, stalling over Palestinian opposition to Israel’s demand that it be recognized as a Jewish state, and over settlements.

Netanyahu’s senior coalition partner, Foreign Minister Avigdor Lieberman, said he would rather Israel hold an early election than meet Abbas’s demands to free more prisoners.

Elections are currently expected in November 2017, four years after the last one, but government infighting has often forced snap polls in the past.

Opinion polls suggest Netanyahu could win again, but far rightist cabinet members Lieberman and Naftali Bennett would vie with centrists Finance Minister Yair Lapid and peace negotiator Tzipi Livni, for better placings as coalition partners.