RAMALLAH (Ma'an) -- President Mahmoud Abbas on Sunday said the PLO would return to the United Nations to upgrade Palestine's status in the world body.
"We are going this month to the UN, and in two days the Arab League will announce the specific date," Abbas said at an event marking the anniversary of Yasser Arafat's death.
Abbas said the UN bid would not delegitimize Israel, but rather settlements.
But he said the Palestinian Authority was under pressure to back down.
Israeli Finance Minister Yuval Steinitz said Israel would stop collecting tax revenues for the Palestinian Authority and not hand over any money if Abbas continues to seek observer state membership.
"If the Palestinians continue to advance their unilateral move they should not expect bilateral cooperation. We will not collect their taxes for them and we will not transfer their tax revenues," he said.
On Wednesday, the Palestinian Authority circulated a draft resolution to UN member states that calls for upgrading its UN status to that of observer state, despite objections by the United States and Israel.
"It cannot be that they hit us unilaterally and then expect bilateral cooperation with us on economic matters," Steinitz, a close ally of Israeli Prime Minister Benjamin Netanyahu, told a town hall meeting in the southern Israeli city of Beersheba.
Interim peace deals task Israel with collecting taxes and customs duties on the Palestinian Authority's behalf amounting to around $100 million a month, on goods imported into the Palestinian territories.
Israel has previously frozen payments to the Palestinian government during times of heightened security and diplomatic tensions, provoking strong international criticism.
The Palestinians are currently considered an observer "entity" at the United Nations. Upgrading them to a non-member state, similar to the Vatican's UN status, would implicitly recognize Palestinian statehood.
It could also grant them access to bodies such as the International Criminal Court in The Hague, where they could file complaints against Israel.
The status upgrade seems certain to win approval in any vote in the General Assembly, which is composed mostly of post-colonial states historically sympathetic to the Palestinians.
Palestinian diplomats also are courting European countries to further burnish their case.