Palestinian officials strongly condemned Israel on Monday after it announced plans for 1,000 new settler homes in East Jerusalem.
Jibril Rajoub, a senior member of Fatah, warned of violent consequences likely to follow the latest settlement plans, Ma'an reported.
"Such unilateral acts will lead to an explosion," he told a gathering of foreign journalists in the West Bank city of Ramallah.
"If he wants to keep pushing us all into a vicious circle of bloodshed and killing he must draw the right conclusion from what happened in Gaza," Rajoub added.
Senior PLO negotiator Saeb Erekat said the decision "amounts to evidence of an intent to further commit crimes defined by and punishable under international law".
"The announcement by Israel's housing minister, Uri Ariel, who is already a settler, of his intent to occupy a seized Palestinian home in Silwan is just another shocking reminder of Israel's accelerating efforts to forcibly displace Palestinians from Jerusalem and turn the Holy City of three faiths into an exclusive Jewish city."
The official said that the international community must take action to save the "two-state solution" from "colonial expansionism" and support the PLO's efforts at the Security Council to set a deadline for ending the 47-year Israeli occupation.
Erekat also urged divestment from all companies linked directly or indirectly to the "Israeli occupation, colonization, and Apartheid policies".
An Israeli official told AFP that the regime has given the green light for planning some 400 homes in Har Homa settlement and 600 in Ramat Shlomo.