Prime Minister Benjamin Netanyahu warned on Sunday that Israel would take unilateral measures against the Palestinians if they go ahead with applications to adhere to international treaties.
"These will only make a peace agreement more distant," he said of the applications the Palestinians made on Tuesday to adhere to 15 treaties.
"Any unilateral moves they take will be answered by unilateral moves at our end."
Netanyahu's remarks, made at the beginning of the weekly cabinet meeting, came as Israeli and Palestinian negotiators prepared to meet with US envoy Martin Indyk, in a last-ditch attempt to save teetering peace talks from collapse.
US Secretary of State John Kerry, the driving force behind the peace push, warned on Friday that there were "limits" to the time and energy Washington could devote to the talks process, as his appeals to both sides to step back from the brink fell on deaf ears.
Palestinian president Mahmud Abbas rejected a plea from Kerry to withdraw the treaty applications, while Netanyahu ignored US appeals to refrain from tit-for-tat moves, asking for a range of options to be drawn up for retaliation.
Israel says Abbas's move was a clear breach of the commitments the Palestinians gave when peace talks were relaunched in July to pursue no other avenues for recognition of their promised state.
The Palestinians say Israel had already reneged on its own undertakings by failing to release a fourth and final batch of prisoners last weekend, and the treaty move was their response.
"The Palestinians have much to lose from a unilateral move. They will get a state only through direct negotiations and not through empty declarations or unilateral moves," Netanyahu said.
"We are prepared to continue talks, but not at any price."