Maale Adumim
© Reuters/Baz RatnerWest Bank Jewish settlement of Maale Adumim, near Jerusalem December 2, 2012
France and Britain are reportedly considering moves against Israel over Tel Aviv's decision to expand settlement construction in occupied territories, diplomats told an Israeli newspaper. This may include recalling ambassadors for the first time.

This comes as Israeli PM Benjamin Netanyahu ordered the construction of thousands of new homes in Jewish settlements in the area known as E1, between Ma'aleh Adumim and Jerusalem - a step widely seen as retaliation for recognition of Palestine as non-member state by the United Nations.

"This time it won't just be a condemnation, there will be real action taken against Israel," a senior European diplomat told Haaretz daily.

The three European diplomats who spoke to the paper indicated that London and Paris were coordinating their moves against Israel, and have discussed the extraordinary step of recalling their ambassadors for consultations. The action, whatever it may be, could be implemented in the next few days.

"London is furious about the E1 decision," one of the diplomats said.

The recalling of ambassadors is a strong measure that has never been taken by the UK and France against Israel before. Haaretz stressed that the two nations may not take such action right now, but resort to it should the Israeli actions against the Palestinians escalate.

According to the reports, Britain and France already informed the United States and other European countries, including Germany, of their intentions.

This also comes after Israel canceled the transfer of US$120 million collected in taxes on behalf of the Palestinian Authority in an apparent response to the Palestinians UN-bid.

The halted money, collected in taxes for the month of November, was scheduled to be passed on to the Palestinian Authority (PA), which constitutes a large percentage of the Palestinian budget, including paying the salaries of PA officials, Israeli media reported.

The construction of the new settlements in the E1 area connecting the Israeli settlement Ma'aleh Adumim and Jerusalem, could become a big obstacle for the future Palestinian state as it would prevent territorial contiguity between the northern and southern West Bank.