UNITED NATIONS: The Palestinians will launch an International Criminal Court case if the new Israeli government allows settlements in occupied areas near Jerusalem, the Palestinian foreign minister said Wednesday.

Foreign Minister Riyad al-Malki said allowing Jewish settlers into the so-called E1 zone east of Jerusalem would be "trespassing the red lines".

The Palestinians are "absolutely not going to tolerate any construction in that particular area," Malki told reporters after addressing a UN Security Council meeting on the Middle East conflict.

"We will wait to see how Israel will react from now on, especially after the formation of the new government," he added.

E1 is one of the occupied areas where Prime Minister Benjamin Netanyahu's outgoing government has authorized thousands of new settlement homes.

The Palestinian leadership also has a priority list of UN agencies and treaties that could be joined after the UN General Assembly voted to recognize a Palestinian state in November, Malki said.

"We are ready to sign on treaties and conventions, and we are ready also to see ourselves applying for UN agencies and international organizations," Malki said. The foreign ministry was awaiting a "green light" from President Mahmud Abbas.

Abbas agreed to hold back from joining UN agencies after the November 29 vote to give time to the new US administration to launch a Middle East peace initiative.

Malki said incoming US secretary of state John Kerry should visit the region as soon as possible and that 2013 would be a "critical" year for the peace process.

The United States and Israel strongly the opposed the UN vote, insisting that the Palestinians should return to direct talks which have been frozen since September 2010.

US ambassador Susan Rice called on Israel to reconsider its settlements in the occupied territory and impose a freeze on tax transfers to the cash-strapped Palestinian Authority. But she reaffirmed opposition to UN recognition of the Palestinian state.

The United States would not recognize "any reference to the state of Palestine in the United Nations" even if US diplomats take part in a meeting where the Palestinians are present, Rice said.

Malki, told the UN Security Council that Palestinian leaders would work toward peace with any Israeli government that recognizes the Palestinian state.

But he added that actions by Netanyahu since the November 29 vote have been "the complete antithesis of the two-state solution."

"In the wake of the Israeli elections, Palestine is willing to work with any Israeli government to be formed -- provided that it is committed to the General Assembly resolutions giving effect to the state of Palestine and to the pre-1967 borders," Malki told envoys.

The minister said the deadlocked peace process is now at a "crossroads."

Israel must choose between "a meaningful political process" or "force us into an era in which that solution is abandoned and the Palestinian people enter a new stage in their struggle to defend and achieve their rights," Malki said.

Israel's UN ambassador Ron Prosor rejected the criticism.

"The major obstacle to the two-state solution is the Palestinian leadership's refusal to speak to their own people about the true parameters of a two-state solution -- to speak a lexicon of peace, not a litany of war," he told the Security Council meeting on the Middle East.

Prosor said the Palestinians had not shown a "single indication" that they want to return to talks.