Netanyahu: Palestinian U.N. Bid 'Won't Promote State'

Israeli Prime Minister Benjamin Netanyahu on Thursday downplayed a Palestinian attempt to secure upgraded status at the United Nations, saying it won't help them achieve their long-promised state.

"The decision at the United Nations today won't change anything on the ground," Netanyahu said at a ceremony in Jerusalem. "It won't promote the establishment of a Palestinian state, it will distance it.

"Israel's hand is always extended in peace, but a Palestinian state will not be established without (a Palestinian) recognition of the State of Israel as the Jewish people's state," Netanyahu said.

"A Palestinian state will not be established without a declaration of the end of the conflict, and a Palestinian state will not be created without real security arrangements that protect the State of Israel and its citizens," Netanyahu said.

He added that peace could only be reached through direct negotiations between the sides "without preconditions".

Palestinian President Mahmoud Abbas will later on Thursday present the U.N. General Assembly with a request seeking to upgrade the Palestinian status from observer entity to a non-member observer state.

Despite fierce opposition from Israel and the United States, the move is likely to pass easily, requiring only a simple majority among the General Assembly's 193 member states.

But Netanyahu toned down the expected diplomatic achievement.

"I'd suggest to not get too excited over applause at the United Nations, I remember the applause Israel got from the international community when it decided to unilaterally leave Gaza.

"We got applause and were hit by rockets," he said, referring to persistent rocket fire on southern Israel by Gaza-based militants which two weeks ago spiraled into a major eight-day confrontation.

Foreign Minister Avigdor Lieberman too warned that the U.N. move would ultimately spell a loss for the Palestinians.

"Despite the Palestinians having a clear majority in the vote, they are the ones who will emerge as the big losers from the move on the ground," he said in a statement. "This move just deepens the disagreements and distances the sides from one another."

Abbas has spoken of a relaunch of the stalled peace talks with Israel after the U.N. upgrade is passed, and was expected to lay out his conditions in a speech ahead of the vote.

Meanwhile, Foreign Ministry spokesman Yigal Palmor said Israel was unlikely to take punitive action in the form of axing agreements over the vote, as had been threatened by various ministers.

"We have no intention on canceling any agreement, particularly in the economic field," Palmor told AFP. "What we will do after this vote is to apply the agreements to the letter."

But Palmor reiterated that in appealing to the U.N., the Palestinians were "flagrantly violating" their commitment to resolve the conflict through negotiation.

Israel had previously insinuated it was considering a variety of punitive measures, such as freezing the transfer of tax and customs funds it collects for the Palestinians or even "toppling" the Palestinian Authority, as one Israeli Foreign Ministry policy paper suggested.

Earlier this week, a Foreign Ministry official said Israel was unlikely to make good on such threats, although an official source on Thursday suggested the government could skim off some of the owed tax monies to pay off debts racked up by the Palestinians -- within the framework of the existent agreements.

"We could extract some of these funds to pay off the debts accumulated by the Palestinian Authority," he said, referring to arrears owed to the Israel Electric Company amounting to 700 million shekels ($170 mn/140 mn euros).

"Israel could also reduce the amount of water it supplies, since we supply the Palestinians far more than what the agreements necessitate," he said, speaking on condition of anonymity.