Story highlights Palestine's permanent observer to the U.N. says Israel is staging a "military escalation"

The plan involves speeding up the building of 2,000 units, an Israeli official says

Palestinian official says the move hastens "the destruction of the peace process"

UNESCO on Monday voted to accept a Palestinian bid for full membership

Israeli Prime Minister Benjamin Netanyahu on Tuesday called for speeding up the construction of 2,000 housing units in East Jerusalem and the West Bank.

The announcement from his office comes in retaliation for the U.N. cultural agency UNESCO's vote, a day earlier, to accept a Palestinian bid for full membership.

According to a senior Israeli official, the plan involves building 1,650 units in East Jerusalem and the rest in the West Bank settlements of Efrat and Maaleh Adumin.

The construction will take place in areas that are expected to be part of Israeli territory in any future peace agreement, and there is no contradiction between it and the various peace plans that have been on the table, the official said.

Palestinians claim the land Israel occupied in East Jerusalem and the West Bank after the 1967 war as part of a future Palestinian state.

Palestinian Authority President Mahmoud Abbas has said repeatedly that the Palestinians will not return to negotiations until Israel halts all settlement construction and accepts 1967 border lines.

Israel, for its part, has maintained that negotiations should begin with no preconditions.

"You cannot expect Israel to continue to be restrained when the Palestinian Authority leadership repeatedly slams the door in our face," said the Israeli official, who was not authorized to speak to the media.

As an example of a door slamming, the official cited the UNESCO bid and the effort to win membership in the United Nations among other instances of Palestinian actions that damaged prospects for a peace deal.

The Israeli government has also put a temporary hold on the transfer of Palestinian tax revenue collected by the Israeli government, the official said. Palestinians rely on the revenue to fund government operations, including the payment of public sector salaries.

Nabil Abu Rudeineh, Abbas' spokesman, criticized the Israeli construction announcement, calling the decision one "to accelerate the destruction of the peace process," according to WAFA, the Palestinian Authority's official news agency.

Senior Palestinian negotiator, Mohamad Ishtayeh, similarly condemned the move.

"Two days ago, they (Israeli government) announced the building of one million settlement housing units over the span of ten years. What Israel decided today was another episode in settlement construction. Using the UNESCO Palestinian membership is only looking for excuses and another way of building settlement housing units. This fits within the overall plan which was announced two days ago before the UNESCO vote," he told CNN.

Separately on Tuesday, the permanent observer of the Palestinian Authority to the United Nations, Riyad Mansour, said he sent a letter to the secretary-general of the United Nations and the president of the Security Council on Israel.

"We write today to express our grave concern about the military escalation undertaken by Israel, the occupying Power, against the Gaza Strip," he wrote. Within the past four days, Israeli airstrikes have killed at least 11 people and injured many more, Mansour said.

Since Saturday, scores of rockets have been fired into Israel from Gaza, resulting in the death of one Israeli civilian and the temporary closure of schools and universities in the southern part of the country.

The United States said on Monday that it would cut funding to UNESCO after the agency voted in support of Palestinian membership.

The vote, which required two-thirds approval by UNESCO members, passed with 107 in favor, 14 against, and 52 abstentions.

It was the first such vote by a part of the world body and is separate from the Palestinian bid for full membership in the United Nations.

After Monday's vote, Palestinian officials told CNN they are considering the pursuit of membership in other international groups, such as the World Health Organization.

"Instead of sitting around the negotiating table," Netanyahu said after the vote, Palestinian leaders "have decided to make an alliance with Hamas and are carrying out one-sided endeavors in the U.N., including today. We will not sit with folded arms against these measures which are hurting Israel and are violating bluntly the most basic obligations the parties took in the peace process, to solve the conflict between us through negotiations."