The move followed the approval of 3,000 new housing units beyond the Green Line and the furthering of planning procedures in the area connecting Jerusalem and the town of Ma'aleh Adumim that could prevent the creation of a contiguous Palestinian state.
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Op-ed: Real meaning of UN vote
At the start of the weekly cabinet meeting, Prime Minister Benjamin Netanyahu explained Jerusalem's initial reaction to United Nations General Assembly resolution recognizing Palestine as a non-member state with a quote from the past.
"The attack on Zionism and the State of Israel forces us to reinforce and speed up the implementation of the settlement plans in all the areas the government has decided to settle in. These are not my words, but the words of the government of Prime Minister Yitzhak Rabin in 1975 following the UN resolution that compared Zionism to racism."
Netanyahu clarified that Israel will "continue to build in Jerusalem and in all the places of the State of Israel's map of strategic interests. The PA's unilateral move at the UN is a blatant violation of agreements, and therefore the Israeli government rejects the General Assembly resolution.
"I would like to clarify once again – there will be no Palestinian state without an agreement guaranteeing the security of Israel's citizen, there will be no Palestinian state before the State of Israel is recognized as the Jewish people's state, and there will be no Palestinian state before the Palestinians declare the end of the conflict."
The prime minister thanked the countries that opposed the Palestinian UN bid, saying that "Israel will not agree to have the Judea and Samaria region turn into an Iranian terror base, like what happened in the territories evacuated in Gaza and Lebanon."
He referred to Palestinian President Mahmoud Abbas' UN address as "a scathing incitement speech against the IDF's soldiers and Israeli citizens, while using lies and distorting history. I must also note that Abu Mazen (Abbas) didn't have one word to say about the terror and rocket fire targeting Israel's citizens. This is not the way a person who wants peace should talk."
The finance minister said, "I have no intention of transferring the tax payments to the PA this month. I plan to use them to offset the Palestinian debt to the Israel Electric Corporation."
Steinitz referred to the Palestinian UN bid as a "provocation and an attempt to further a state without recognizing Israel, demilitarization or any security arrangements.
He said that the decision to further construction on the E1 segment was made "because it's time to connect Ma'aleh Adumim with Jerusalem. It should have happened a long time ago. We made it clear to the Americans that if the Palestinians go to the UN, this will be our response."
Education Minister Gideon Sa'ar voiced support for the controversial construction as well. "Since the Six-Day War, all governments have built in Jerusalem and in Judea and Samaria. We are in disagreement on this issue with our friends at the international community, but we will continue building," he said.