Prime Minister Benjamin Netanyahu said Wednesday that construction in Jerusalem is Israel's right and obligation, referring to his recent decision to accelerate settlement building in response to the Palestinians' newly granted UNESCO membership.

"We will continue developing Jerusalem, its neighborhoods, and people," Netanyahu said during a special Knesset session. "This is our right and obligation - not as punishment to the Palestinians but as our basic right."

On Tuesday, Netanyahu and his forum of eight senior ministers decided to initiate a new wave of settlement construction in the West Bank, as part of a wider set of sanctions Israel decided to impose on the Palestinian Authority after it was accepted to UNESCO as a member on Monday.

Netanyahu's office said Tuesday that the construction of 2,000 housing units planned in East Jerusalem, Gush Etzion, and Ma'aleh Adumim should be expedited.

The eight senior ministers also decided to suspend the transfer of tax money which Israel has collected for the Palestinian Authority in October. The money, which amounts to more than NIS 300 million, was supposed to be transferred to the Palestinian Authority before the Eid al-Adha holiday, when the money was to be used to pay the salaries of policemen and clerks of the Palestinian Authority.

A spokesman for Palestinian President Mahmoud Abbas responded to the decision on Tuesday, saying that Israel had decided "to speed up the destruction of the peace process" by deciding to accelerate the construction of settlements on land where the Palestinians aim to found an independent state.

Nabil Abu Rdainah also described as "inhumane" Israel's decision to temporarily halt transfers of funds to the Palestinian Authority.

White House Spokesperson Jay Carney said in a statement on Wednesday that the U.S. was “deeply disappointed by yesterday's announcement about accelerated housing construction in Jerusalem and the West Bank.”

"Our view on these kinds of things has not changed. We don't consider it helpful, we don't consider that it contributes to the environment that we need to move forward,” he said.

On Monday, UNESCO accepted the Palestinian Authority as a full member of the organization.

In response, the U.S. decided to cut off funding to the UN cultural body. State Department spokeswoman Victoria Nuland said Monday that since the vote triggered a long-standing congressional restriction on funding to UN bodies that recognize Palestine as a state before an Israeli-Palestinian peace deal is reached.