The Palestinian Authority "will not yield to extortion," presidential adviser Nimir Hammad said Tuesday of threats by Israeli officials to withhold Palestinian money again.

Hammad's comments followed reports in Israel that the government would refuse to pay Palestinian tax revenues if the PLO applied again for full UN membership.

Citing political sources, Israel radio reported Tuesday that the Israeli government would consider withholding Palestinian money in the event of another UN bid.

Hammad told Ma'an radio that the PA "will not yield to such extortion."

The West Bank government will continue its efforts to establish an independent state on 1967 borders with East Jerusalem as its capital, the adviser to President Mahmoud Abbas said.

In November, Israel froze payment of taxes it collects on behalf of the PA after UNESCO voted to admit Palestine but it released the funds under intense international pressure.

In its statement announcing that Israel would release money owed to the PA for October and November, Israeli Prime Minister Benjamin Netanyahu made it clear he reserved the option to halt transfers again.

"Netanyahu approved the resumption of tax revenue transfers, at this stage, to the Palestinian Authority," said a statement issued by the prime minister's office after his inner cabinet gave its backing.

The statement cited what it described as a suspension of "unilateral moves" by the Palestinian Authority, a reference to any further bids for status upgrades in UN bodies.

"If the Palestinian Authority takes unilateral steps again, the transfer of funds will be reconsidered," the statement said.

Hammad said the PLO would not give up its efforts to join the UN as a full member.

"The Palestinian application is at the UN, and inability to get nine member states to vote in favor never means giving up the Palestinian right to demand statehood," he added.

Abbas submitted an application for full UN membership in September, but without nine votes in the Security Council, the resolution will not pass.

Hammad noted that Israel's threats to freeze tax revenue to the PA were illegal.

"They tried it last month, Israel was boycotted by many countries and was forced under pressure to release that money," he said.

During Israel's tax freeze in November, Ramallah-based Prime Minister Salam Fayyad said the Palestinian Authority was "fast approaching the point of being completely incapacitated" and would not be able to pay about 150,000 workers if Israel did not release the money.