The Palestinian Authority needs to know that there are two sides to every coin, said Public Security Minister Yitzhak Aharonovitch (Yisrael Beytenu) on Saturday, in defense of the government's approval of 3,000 new housing units in Jerusalem and the West Bank.

The move came on Friday in response to the UN approving the Palestinian UN bid for  non-member observer state status. The inner cabinet also decided on Friday to give the go ahead for the planning of thousands of housing units in area E1 that connects Jerusalem and Ma’aleh Adumim.

"PA President Mahmoud Abbas was wrong in his address to the United Nations," Aharonovitch said at a weekly cultural event in Ramat Hasharon. "Abu Mazen (Abbas) made a speech full of hate, and it is impossible to achieve peace with him," he continued.

"Those who violate an agreement need to know that there are two sides to a coin," he asserted.

"There is a national agreement on a united Jerusalem and settlement blocs" he added. "Wadi Ara may be included in a land swap in the future."

Speaking at the same event, Meretz leader Zehava Gal-On decried the decision. "The settlements must be evacuated, not built up," she said. "There is no greater obstacle to an agreement than the settlements, and there is no heavier economic millstone that burdens the middle class and weaker sectors of society in Israel than the occupation."

She also slammed Labor leader Shelly Yacimovich for her "feeble reaction" to the plan. Gal-on said that Yacimovich's "hesitant response" is a continuation of the Labor Party's shift to the right, and a direct continuation of the party's "build and cry" policy, which she accused the party of implementing through the ages.

The Labor Party had criticized the timing of the decision to announce new building beyond the Green Line.

"There is no objection to Israel's right to build in Jerusalem, but at this time, it is advisable to lower the flames," the party stated on Friday.

"Declarations of this nature promote nothing and are liable to hurt Israel's interests in Jerusalem and in the settlement blocs," the statement added.

Last week, Washington urged Israel not to allow construction in the area known as E-1 between Jerusalem and Ma’aleh Adumim as a possible response to the Palestinian UN bid.

Building in E-1, which would create contiguity between Jerusalem and Ma’aleh Adumim to the northeast beyond the Green Line, is something various Israeli governments have long wanted to do, but which US opposition has prevented.

In recent weeks, following appeals by the US and other international players not to respond in an overly harsh manner that would make a future return to negotiations even more difficult, Israel has moved from suggestions that it immediately annul the Oslo Accords and annex the large settlement blocs, to “tamer” measures, such as deducting money from taxes collected on behalf of the PA to cover the estimated NIS 800 million owed to the Israeli Electric Cooperation.

Palestinian Authority chief negotiator Saeb Erekat condemned the building plans on Friday, saying they ran counter to efforts to restart the peace process.

"While the Palestinians are doing everything possible to keep the two-state solution alive, including with our vote in the United Nations, yesterday, the Israeli government is doing everything possible to destroy it," Erekat stated.

Herb Keinon and Reuters contributed to this report.

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