Israeli leaders on Sunday threatened to take tougher action against the Palestinians over their decision to join the International Criminal Court, a day after freezing the transfer of more than $125 million in tax funds. In a first punitive response, Israeli Prime Minister Benjamin Netanyahu decided in consultation with senior ministers on Thursday to withhold the next monthly transfer of tax revenue, totaling some 500 million shekels ($125 million), an Israeli official said on Saturday. Last week's Palestinian decision to seek membership in the international court has infuriated Israel. The Palestinians have said they intend on using their new membership in the Hague-based tribunal to press war crimes cases against Israel. "The Palestinian Authority has chosen confrontation with Israel and we will not sit idly by," Prime Minister Benjamin Netanyahu told his Cabinet. He said Israel would not allow its soldiers to be "hauled" before the court.

In an initial response over the weekend, Israel said it had frozen tax funds collected for the Palestinians. The tax revenues are critical to running the Palestinian Authority, which exercises limited self-rule, and paying public sector salaries. Israel took a similar step in December 2012, freezing revenue transfers for three months in anger at the Palestinians' launch of a campaign for recognition of statehood at the United Nations. "This is highway robbery. Not only is this illegal, they are adding money theft to land theft. The revenues belong to the Palestinian people, they go to pay salaries and support our economy. Israel has no business deciding to steal our funds," senior Palestinian negotiator Hanan Ashrawi told Reuters. Under interim peace deals from the 1990s, Israel collects at least $100 million a month in duties on behalf of the Palestinian Authority. In addition to the revenue freeze, an Israeli official said Israel was "weighing the possibilities for large-scale prosecution in the United States and elsewhere" of Palestinian President Mahmoud Abbas and other senior Palestinian officials. The U.S. is also unpleased with the application. Washington sends about $400 million in economic support to the Palestinians every year. Under U.S. law, that aid would be cut off if the Palestinians used membership of the ICC to press claims against Israel.

Netanyahu's government minister for strategic affairs, Yuval Steinitz, said Israel could take even tougher action. "If the Palestinian Authority continues to attack us, I assume we will consider other steps," he said, without elaborating.

The Palestinians sought membership in the international tribunal after the U.N. Security Council voted down a resolution setting a three-year deadline for the establishment of a Palestinian state on lands occupied by Israel. On Sunday, Palestinian President Mahmoud Abbas said officials were considering going back to the council. "We might go again and again and again," he said. "We will never get bored until we gain the recognition and in the end they will recognize us."