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Palestinian president Mahmoud Abbas speaks in the West Bank city of Ramallah on Sunday. Mr. Abbas spoke about Palestinian membership in the International Criminal Court.ABBAS MOMANI/AFP / Getty Images

Israeli leaders on Sunday threatened to take tougher action against the Palestinians over their decision to join the International Criminal Court, a day after freezing the transfer of more than $100-million (U.S.) in tax funds.

Last week's Palestinian decision to seek membership in the international court has infuriated Israel. The Palestinians have said they intend on using their new membership in the Hague-based tribunal to press war crimes cases against Israel.

"The Palestinian Authority has chosen confrontation with Israel and we will not sit idly by," Prime Minister Benjamin Netanyahu told his cabinet. He said Israel would not allow its soldiers to be "hauled" before the court.

In an initial response over the weekend, Israel said it had frozen tax funds collected for the Palestinians. The monthly transfers are a key source of revenue for the cash-strapped Palestinian government.

Mr. Netanyahu's government Minister for Strategic Affairs, Yuval Steinitz, said Israel could take even tougher action.

"If the Palestinian Authority continues to attack us, I assume we will consider other steps," he said, without elaborating.

The Palestinians sought membership in the international tribunal after the UN Security Council voted down a resolution setting a three-year deadline for the establishment of a Palestinian state on lands occupied by Israel. On Sunday, Palestinian president Mahmoud Abbas said officials were considering going back to the council.

"We might go again and again and again," he said. "We will never get bored until we gain the recognition – and in the end they will recognize us."

The ICC can prosecute individuals accused of genocide, crimes against humanity and war crimes committed since July 1, 2002, when the court's founding treaty, the Rome Statute, came into force.

Israeli legal officials quoted by the top-selling newspaper, Yediot Aharonot, said that while the Palestinian decision to join the ICC could be "a nuisance for Israel, it would not yield any practical legal results."

Meanwhile, Israel's Supreme Court rejected an Israeli military plan to extend its West Bank separation barrier through a Palestinian village near Jerusalem. Residents in Battir had argued the structure would destroy ancient farming terraces. In June, the United Nations cultural agency, UNESCO, designated Battir a World Heritage site. The Battir area is one of the last remaining openings to the West Bank from southern Jerusalem.

Israel says the barrier, which it began building after a wave of Palestinian attacks in 2002, is crucial for its security, while Palestinians see it as a land grab of territory they want for a future state.

Battir is famed for its ancient terraces and Roman-era irrigation system, which is still used by villagers. The landscape encompasses a series of agricultural valleys. It is dotted with ancient villages, fortifications and graves.

UN figures show that Israel has already built about two-thirds of the barrier – a network of towering concrete walls, barbed-wire fences, trenches and closed military roads that will extend 712 kilometres when completed, separating the West Bank from Israeli territories.

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