Palestinian President Mahmoud Abbas has warned of legal and diplomatic action to stop Israeli settlement expansion, on the eve of a new peace mission by US Secretary of State John Kerry.
Abbas's warning came after Israel freed 26 prisoners earlier in the day, as part of US-brokered peace talks, which Kerry hopes to reinvigorate during his visit.
The release prompted celebration among Palestinians, who welcomed the prisoners back into the West Bank and Gaza Strip after they had spent two to three decades in Israeli jails.
But as Kerry geared up for his 10th visit since March, an anticipated announcement by Prime Minister Benjamin Netanyahu's government of further settlement construction looked set to cast a new cloud over the talks.
Abbas warned the Palestinians would act to halt any construction in territories they expect to form part of their promised state.
"We will not remain patient as the settlement cancer spreads, especially in (annexed Arab east) Jerusalem, and we will use our right as a UN observer state by taking political, diplomatic and legal action to stop it," he said.
Kerry has been pressing the two sides to agree on a framework for a final peace agreement ahead of an agreed late April target date for the talks to conclude.
The prisoners were the third batch of 104 detainees that Netanyahu pledged to release in four stages when the peace talks were revived in July. All were imprisoned before the 1993 Oslo accords, which launched the Middle East peace process.
Palestinians hailed the freed prisoners as heroes imprisoned for fighting against the Israeli occupation, with some welcomed back to Ramallah in the West Bank, others to east Jerusalem and the remainder into the Hamas-ruled Gaza Strip.
Gaza's Islamist Hamas prime minister Ismail Haniya welcomed the prisoners' release but added: "we reject negotiating with the occupation (Israel) and we do not accept that settlements should be expanded in exchange for that".
Netanyahu criticised the hero welcome for the prisoners, who had served 19 to 28 years after being convicted of killing Israeli civilians or soldiers.
"Murderers are not heroes," he said.
A senior US State Department official, speaking on condition of anonymity, described the release as "really painful, difficult on the Israeli side".
Tuesday's release was expected to be accompanied by an announcement of new construction plans for Jewish settlements in the occupied West Bank, including east Jerusalem, as the previous two prisoner releases were.
Such a move likely will infuriate Palestinians and the international community.
