Israel’s foreign minister called Sunday for new Knesset elections, saying a return to the polls was preferable to freeing Palestinian prisoners for new peace talks.

The shock statement by Avigdor Liberman, whose Yisrael Beytenu party ran on a joint list with Prime Minister Benjamin Netanyahu’s Likud in last year’s elections, came less than a week after peace talks between Israel and the Palestinians collapsed when Israel refused to release a fourth round of prisoners and the Palestinian Authority applied for membership in 15 UN and international treaties.

Speaking at a conference sponsored by The Jerusalem Post in New York, Liberman said freeing terrorists was “no longer an option” for Israel.

The foreign minister said he and Yisrael Beytenu would prefer new elections to going ahead with the “grand bargain” Netanyahu was ready to approve last week.

Liberman said the stalemate between Israel and the Palestinians could be resolved in three possible ways: returning to a deal which would release terrorists, forming a new coalition without elections which would impose new conditions, or holding new elections.

He said the first two options were “unacceptable” to his party.

The tripartite package deal between Jerusalem, Ramallah and Washington had stipulated that Israel would release a fourth and final round of Palestinian prisoners, along with hundreds of other prisoners of Israel’s choosing, in exchange for the extension of peace talks until the end of 2014 and the release of convicted Israeli spy Jonathan Pollard by the United States in time for Passover eve.

The Palestinians, however, said the 27 prisoners in the fourth round – among them 14 Arab Israelis – would have to be released before an extension could be discussed, as Israel had pledged months ago to free them. In return, the Palestinians had sworn not to make any unilateral appeals to international bodies. Once it was clear that Israel would not release the prisoners, Palestinian Authority President Mahmoud Abbas made a unilateral move that threw the peace talks into disarray — a televised application to 15 international treaties on behalf of the Palestinian state.

Liberman said Sunday that Abbas’s unilateral move amounted to “blackmail.” He said that after such a “dramatic and one-sided move,” Israel could no longer consider the now-irrelevant package deal an option and release hundreds of prisoners.

According to a report on Israel’s Channel 2 news, citing an Israeli source Liberman was responding to an American request for Israel to return to negotiations and to releasing prisoners while ignoring Abbas’s applications to the international treaties.

Though the talks seemed all but dead over the weekend, on Saturday the sides agreed to meet again in a last-ditch effort to revive negotiations.

The foreign minister said that of the three options he had set out, he preferred the third, as a new coalition was “not an option” and nor was a deal that would free terrorists.

“I support negotiations with the Palestinians. We’re ready for any kind of discussion, not ready for blackmail,” Liberman said.

Though he said he was willing to negotiate with the Palestinians, Liberman said the Palestinian Authority wasn’t a real political entity to negotiate with. Instead, Israel’s negotiating partners were “Fatahland” in the West Bank and “Hamastan” in the Gaza Strip.

He said that the “real solution” to the demographic crisis facing Israel was to “bring all Jews to Israel” – as many as possible, including from New York. He said the mass emigration from the former Soviet Union proved Jewish immigrants were a demographic asset to Israel.

Later in his address, Liberman said Israel’s position in the international arena was “stable.” He added that the Boycott, Divestment and Sanctions (BDS) threat against Israel, a “bastion of Western values in the Middle East,” was “exaggerated.”

He also said he hoped the rift between the US and Russia over the latter’s annexation of the southern Crimean region from the Ukraine would not damage the cooperation between the two countries on the ongoing humanitarian crisis in Syria, as well as the Iranian nuclear threat.

In response to Liberman’s speech, some politicians from the Israeli left said his speech reflected the Netanyahu government’s “intransigence,” while others agreed new elections were more a necessity than a threat.

Opposition leader and Labor party head Isaac Herzog, who said on Sunday morning that a new coalition should be built in light of the fruitless peace talks under Netanyahu, responded to Liberman’s speech by saying he would welcome new elections.

“In light of the continued failure of the current government in each and every area, new elections would not be a threat — they would give hope,” Herzog said.

Earlier Sunday, Herzog had invited Finance Minister Yair Lapid’s Yesh Atid party and Justice Minister Tzipi Livni’s Hatnua to break away from the Netanyahu-led coalition and join him in a “coalition for peace” which would also include the ultra-Orthodox, with whom Herzog has forged an unlikely alliance.

After Liberman’s speech, Herzog repeated his invitation to Lapid and Livni to “draw their conclusions” from the foreign minister’s message and leave the coalition.

Meretz head Zahava Gal-on expressed similar sentiments, saying that “Liberman, in his statements, reveals the face of the Israeli government’s intransigence.”

Gal-on said the speech had exposed Liberman as a “violator of commitments” who “serially” opposed peace overtures.

“Maybe it really would be better to return to the polls and get rid of this bad government,” she said.

Marissa Newman contributed to this report.