Israeli settlements on occupied territory - one of the most contentious issues of the Middle East peace process.<br/> Construction by the Jewish state on territory captured in the 1967 war is one of the major sticking points between Israelis and Palestinians.<br/> On Tuesday, the issue came to the fore once again, as Israeli Prime Minister Benjamin Netanyahu called for the accelerated construction of around 2,000 housing units.<br/> The decision came one day after UNESCO awarded the Palestinians full membership of the U.N. cultural agency, a diplomatic victory for the Palestinian Authority in its push for recognition as a state at the U.N.<br/> Israel also decided to temporarily withhold funds that it collects on behalf of the Palestinian Authority.<br/> The Head of the Palestinian Governmental Press Office said such moves were "illegal".<br/> (SOUNDBITE) (English) GHASSAN KHATIB, HEAD OF PALESTINIAN GOVERNMENTAL PRESS OFFICE:<br/> "This Israeli decision of responding to the voting for accepting Palestine in the UNESCO by completely illegal and unacceptable measures such as settlement expansion, which is about violating the basic rights of the Palestinians, is completely unacceptable and is completely rejected and condemned by the Palestinian people and authority."<br/> Israel and the United States have strongly condemned and discouraged the Palestinian bid for statehood at the U.N.<br/> After UNESCO's decision, the US said it would stop its funding of the organisation.<br/> Simon Hanna, Reuters.
