The Israeli government is to ask US lawmakers to taking punitive measures against the Palestinians after their bid to join the International Criminal Court (ICC), senior Israeli officials said.
Government officials said they are to contact pro-Israel Congressmen in Washington to ensure they enforce a recently passed bill that could see US aid to the Palestinian Authority (PA) - $400m (£261m) annually - stopped, Haaretz newspaper reported.
The legislation approved last month stipulates that the US State Department should halt funding to the PA if it launches any action against Israel at the ICC.
The PA filed documents to join the ICC last week, in a move that has infuriated Israel.
The application means that after a 60-day waiting period the Palestinians could ask prosecutors in The Hague to open war crimes investigations against Israel.
In a retaliatory move, Israel said it will withhold more than £80m in taxes collected on behalf of the PA.
"The Palestinian Authority has chosen confrontation with Israel and we will not sit idly by," Prime Minister Benjamin Netanyahu told his Cabinet adding that Israel would not allow its soldiers to be "hauled" before the court.
Meanwhile Palestinian President Mahmoud Abbas said he plans to resubmit a resolution demanding the end of the Israeli occupation at the UN Security Council after it failed to win enough votes last week.