Israel could retaliate for the Palestinian Authority’s moves to join UN agencies by annexing territory or with financial sanctions, right-wing ministers warned Wednesday.

“If they are now threatening [to go to UN institutions], they must know something simple: They will pay a heavy price,” Tourism Minister Uzi Landau told Israel Radio. “One of the possible measures will be Israel applying sovereignty over areas that will clearly be part of the State of Israel in any future solution.”

Israel could also hurt the Palestinians economically by acting “to block financial aid to them,” the minister added.

Landau’s remarks were referring to the so-called settlement blocs, areas of the West Bank that Israel hopes to retain in any future peace deal.

Palestinian Authority President Mahmoud Abbas on Tuesday made a public show of beginning steps to join several UN agencies, abandoning a pledge to freeze such action for the duration of peace talks, which are scheduled to end April 29.

Abbas made his announcement just hours after Israel reissued tenders for hundreds of homes in the east Jerusalem neighborhood of Gilo, and as Washington was working around the clock to resolve a major dispute over Palestinian prisoners.

Likud MK Moshe Feiglin addresses the Knesset plenum during a debate of Israeli sovereignty on the Temple Mount, Tuesday, February 25, 2014 (photo credit: Flash90)

Likud MK Moshe Feiglin addresses the Knesset plenum during a debate of Israeli sovereignty on the Temple Mount, Tuesday, February 25, 2014 (photo credit: Flash90)

Deputy Knesset Speaker Moshe Feiglin (Likud) called for Israel to “announce the cancellation of the infernal [Oslo] agreements and to exercise Israeli sovereignty over all the territory.”

Deputy Minister Ofir Akunis characterized Abbas’s move as “extortion.”

“The Palestinians are removing their mask to reveal their true face… that the last thing that interests them is a diplomatic solution,” he said.

“The only thing that interests them is dancing in the streets with heinous murderers,” he added, referring to demands that Israel release Palestinian prisoners, some of whom were convicted of murdering Israelis.

He added that the US also understands that “nothing satisfies Abbas and that Palestinian extortion knows no bounds.”

The standoff came soon after US Secretary of State John Kerry left Israelafter a lightning visit on Tuesday.

He had been due to fly back to the region on Wednesday for talks in Ramallah with Abbas, but he canceled his visit following the Palestinian leader’s announcement, while attempting to remain optimistic.

“It is completely premature tonight to draw… any final judgement about today’s events and where things are,” he said in Brussels.

The top US diplomat had hoped to convince the Palestinians to extend the faltering talks beyond their April 29 deadline, with the sides discussing a proposal which would have included a limited freeze on settlement construction.