Israeli Prime Minister Benjamin Netanyahu, threatening to punish the Palestinians for unilateral moves towards statehood, said on Sunday Israel was willing to press on with US-brokered peace talks but not "at any price".
Netanyahu did not immediately specify what action he might take after President Mahmoud Abbas signed 15 international conventions, mainly through the United Nations, that Israel fears could give the Palestinians greater leverage against it.
U.S. Secretary of State Kerry's intensive attempts to put the talks that began in July back on track and extend them beyond an April 29 deadline unraveled in the past week after Abbas's surprise move. Palestinians said Abbas took the step in response to Israel's failure to carry out a pledge to free several dozen Palestinian prisoners. Israel said it first wanted a Palestinian commitment to keep negotiations going past the end of the month.
"They (Palestinians) 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 the weekly meeting of his cabinet.
"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," he said.
In an interview with Israeli Army Radio, chief Palestinian negotiator Saeb Erekat bridled at calls by some of Netanyahu's cabinet ministers for economic sanctions against Abbas's Palestinian Authority, which exercises limited self-rule in the occupied West Bank.
"Why are you threatening us as if we are sending suicide bombers to Tel Aviv?" Erekat asked.
In the West Bank city of Ramallah, Safa Nassereldeen, the Palestinian minister of telecommunications, said Israel had informed a cellular phone 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 immediate comment.
Israel, which imposes tough restrictions on the passage 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 Hamas Islamist-run territory after the peace talks with Abbas resumed in July.
Nabil Abu Rdainah, an Abbas spokesman, said Israel that was taking unilateral steps through its continued settlement activities in occupied territory Palestinians seek for a state and its failure to release the prisoners.
Palestinians fear the Israeli settlements, which most countries view as illegal, will deny them a viable and contiguous state. Stung by his diplomatic setback, just as a complex deal for the negotiations' extension was emerging, Kerry had said the United States was evaluating whether to continue its role in the talks. It accused both sides of taking unhelpful steps.
Martin Indyk, a U.S. mediator, has been holding further meetings with Israeli and Palestinian negotiators since Kerry's latest mission ended in failure. Israeli and Palestinian officials said Indyk was expected to sit down with the negotiators again on Sunday.
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 the settlement issue. In a statement on Abbas's adoption of international conventions, New York based-Human Rights Watch called on the United States to support rather than oppose his move to join core treaties on human rights and laws of war.
"It is disturbing that the Obama administration, which already has a record of resisting international accountability for Israeli rights abuses, would also oppose steps to adopt treaties requiring Palestinian authorities to uphold human rights," said Joe Stork, deputy Middle East director at Human Rights Watch.
The United States should push the Palestinians and the Israelis to better respect human rights, he said.