Jerusalem (CNN) -- Israeli Prime Minister Benjamin Netanyahu defended his government's decision Wednesday to speed up construction in East Jerusalem.





"We will continue to build in Jerusalem. This is our right and obligation," Netanyahu said at a Knesset memorial ceremony for former tourism minister Rehavam Ze'evi, who was assassinated by Palestinian militants a decade ago.





"This is not a punishment -- it is our national right to build our capital. I guarantee that we will never return to the situation we had on the evening of the Six Day War," Netanyahu said.





His remarks came a day after his government announced it was expediting construction of 2,000 housing units in East Jerusalem and the occupied West Bank and suspending the transfer of Palestinian tax revenue in wake of the Palestinian Authority's successful membership bid at UNESCO, the U.N. cultural, science, and education agency.





British Foreign Minister William Hague released a statement Wednesday condemning the Israeli measures and calling them "a serious blow to the (Middle East) Quartet's efforts to restart peace negotiations."





"This settlement building program is illegal under international law and is the latest in a series of provocative and unhelpful settlement announcements," he said in the statement.





In Washington, White House press secretary Jay Carney said President Barack Obama's administration was "deeply disappointed" with Israel's announcement.





"Unilateral actions work against efforts for direct negotiations" necessary to achieve a two-state solution to the Israel-Palestinian conflict, Carney told reporters Wednesday.





On Tuesday, a senior Israeli official said the planned construction involves 1,650 units in East Jerusalem and the rest in the West Bank settlements of Efrat and Maaleh Adumin.





The construction will take place in areas that are expected to be part of Israeli territory in any future peace agreement, the official said, and there is no contradiction between it and the various peace plans that have been on the table.





Palestinians claim the land Israel occupied in East Jerusalem and the West Bank after the 1967 war as part of a future Palestinian state.





Palestinian Authority President Mahmoud Abbas has said repeatedly that the Palestinians will not return to negotiations until Israel halts all settlement construction and accepts the borders in place before the 1967 Six Day War.





Israel, for its part, has maintained that negotiations should begin with no preconditions.





"You cannot expect Israel to continue to be restrained when the Palestinian Authority leadership repeatedly slams the door in our face," said the Israeli official, who was not authorized to speak to the media.





As an example of a door slamming, the official cited the UNESCO bid and the effort to win membership in the United Nations among other instances of Palestinian actions that damaged prospects for a peace deal.





The Israeli government has also put a temporary hold on the transfer of Palestinian tax revenue collected by the Israeli government, the official said. Palestinians rely on the revenue to fund government operations, including the payment of public sector salaries.





Hague, in his statement, expressed concern about that as well, saying it would have "direct implications for the Palestinian Authority's ability to maintain effective security in the West Bank."





Nabil Abu Rudeineh, Abbas' spokesman, criticized the Israeli construction announcement Tuesday, calling the decision one "to accelerate the destruction of the peace process," according to WAFA, the Palestinian Authority's official news agency.





Senior Palestinian negotiator Mohamad Ishtayeh also condemned the move.





"Two days ago, they (the Israeli government) announced the building of 1 million settlement housing units over the span of 10 years. What Israel decided today was another episode in settlement construction. Using the UNESCO Palestinian membership is only looking for excuses and another way of building settlement housing units. This fits within the overall plan which was announced two days ago before the UNESCO vote," he told CNN.





Separately on Tuesday, the permanent observer of the Palestinian Authority to the United Nations, Riyad Mansour, said he sent a letter to the U.N. secretary-general and the president of the Security Council about Israel.





"We write today to express our grave concern about the military escalation undertaken
To what did the Palestinians want full membership? What did Netanyahu say What did the Abbas spokesman say? Who expresses disappointment? Where did they build their capital? What did Abbas say
UNESCO, the U.N. cultural, science, and education agency. "We will continue to build in Jerusalem. This is our right and obligation," "You cannot expect Israel to continue to be restrained when the Palestinian Authority leadership repeatedly slams the door in our face," President Barack Obama's administration Jerusalem. Palestinians will not return to negotiations until Israel halts all settlement construction and accepts the borders in place before the 1967 Six Day War.
question: To what did the Palestinians want full membership?, answer: UNESCO, the U.N. cultural, science, and education agency. | question: What did Netanyahu say, answer: "We will continue to build in Jerusalem. This is our right and obligation," | question: What did the Abbas spokesman say?, answer: "You cannot expect Israel to continue to be restrained when the Palestinian Authority leadership repeatedly slams the door in our face," | question: Who expresses disappointment?, answer: President Barack Obama's administration | question: Where did they build their capital?, answer: Jerusalem. | question: What did Abbas say, answer: Palestinians will not return to negotiations until Israel halts all settlement construction and accepts the borders in place before the 1967 Six Day War.