Britain, France Threaten Diplomatic Retaliation Over Israeli Settlement Construction

Diplomatic fissures deepened between several European countries and Israel over the weekend, as Jerusalem announced the construction of 3,000 new housing units in settlement blocs east of Jerusalem and used over 100 million dollars in Palestinian tax revenue to cover unpaid Palestinian debts owed to the Israel Electric Corporation. Ha'aretz reports on the possibility that Britain and France are coordinating unprecedented diplomatic retaliation and may recall their ambassadors in protest. The Israeli announcement came in the aftermath of the Palestinian Authority's unilateral U.N. diplomatic gambit, and sources familiar with Israeli thinking on the controversy have suggested elsewhere that France's yes vote and Britain's abstention on the statehood resolution had substantially eroded those countries' leverage with Jerusalem.