Palestinians have said they will have no choice but to complain about Israel to the International Criminal Court if it proceeds with controversial settlement plans.
Palestinian Foreign Minister Riad Malki said his government's decision will largely depend on what the Israelis do with the so-called "E1" area outside the Arab suburbs of East Jerusalem.
The Palestinians have previously suggested that bringing their various disputes with Israel to the Hague-based court was an option.
However, Mr Malki's remarks yesterday were the most direct threat his government has made against Israel to date.
"If Israel would like to go further by implementing the E1 plan and the other related plans around Jerusalem then yes, we will be going to the ICC," he said.
"We have no other choice. It depends on the Israeli decision."
Mr Malki was speaking after a meeting of the UN Security Council on the Middle East.
The International Criminal Court prosecutes charges of genocide, war crimes and other major human rights violations.
The Palestinians must first apply to join the court, and once a member they could refer Israel for investigation.
The Palestinians became eligible to join the ICC after the UN General Assembly upgraded the Palestinians' status at the world body in November from "observer entity" to "non-member state," a move that was widely seen as a de facto recognition of an independent Palestinian state.