The Palestinians must be prepared for the possibility that the US and Israel may impose severe economic restrictions on the Palestinian Authority the day after the UN upgrades the status of a Palestinian entity to non-member state, chief PLO negotiator Saeb Erekat warned on Thursday.

“It’s very important to be prepared for Israeli reactions to the upgrading of the Palestinian state’s status so as to avoid a state of internal chaos,” Erekat said in an report about the implications of the statehood bid.

“Palestinian institutions must be prepared for a state of emergency to limit, as much as possible, the negative impact of the anticipated step.” Erekat’s warning came as the PA leadership reiterated its intention to ask the UN later this month for an upgrade to the status of nonmember state.

The chief negotiator said he expected Congress and the US administration to take a number of “retaliatory” measures in response to the Palestinian statehood bid, such as freezing financial aid to the PA, closing the PLO mission’s office in Washington and exerting pressure on governments worldwide to dissuade them from supporting the bid.

Erekat said he also expected the Americans to suspend funds to a number of UN agencies and organizations, first and foremost the United Nations Relief and Works Agency (UNRWA) which works solely with Palestinians.

As for Israel’s expected response, Erekat said that the Israeli government may carry out its threat to unilaterally withdraw from some areas in the West Bank, freeze tax revenues belonging to the PA, instigate a “security deterioration” on the ground and impose restrictions on the Palestinian economy, particularly its private sector.

Erekat said he expected Israel to also annex the Jordan Valley, expand settlements and walk away from the Oslo Accords that were signed with the PLO in 1993.

Meanwhile, the PLO published a “position paper” explaining its motives behind the renewed statehood bid.

The paper said that the PLO “seeks to enhance Palestine’s status to that of an observer state, as a significant step toward fulfilling the Palestinian people’s natural, historical and legal rights to self-determination and independence.”

According to the PLO, “this step is a continuation of the standing Palestinian application for membership at the United Nations, which was lodged on September 23, 2011.

“Together with the international community, Palestine believes that the status quo of political deadlock, while occupation, colonization and apartheid policies become further entrenched, is neither acceptable nor sustainable. The Palestinian initiative intends to protect the prospects of peace and accelerate its realization.

This step reaffirms and protects the internationally endorsed two-state solution. It is anchored in relevant United Nations resolutions, including General Assembly resolutions 181 and 194, and international law.” The PLO paper added that “according to international law, self-determination is a universally recognized inalienable right that is not subject to negotiation.

Independence has never been a final-status issue and statehood has never been negotiated bilaterally. The right of peoples to self-determination is non-negotiable and the Palestinian people will thus never negotiate this right or subject it to Israel’s whims. Enhancing Palestine’s status at the UN is a step toward justice and will be an affirmation of the international community’s commitment to the universal values of human rights, as embodied in the United Nations Charter.”

The PLO explained that the Palestinian “initiative seeks to end occupation and realize the establishment of the State of Palestine; it does not seek to delegitimize or isolate Israel.

Rather, this step seeks to delegitimize the policies of occupation and colonization and to overcome the paralysis in the international community, especially with regard to ending Israel’s impunity and compelling its compliance with international law.”

The Palestinian effort, according to the PLO, is consistent with the formal Palestinian recognition of Israel in 1993, and consistent with the internationally endorsed goal of the peace process – two states living side by side in peace and security on the basis of the pre-1967 borders.

“Recognition is necessary to achieve the ultimate objective of the two-state solution and expedite its realization at a time when Israel is incessantly and recklessly undermining that solution and the prospects for achieving a just peace,” the PLO said.

Palestinian Authority President Mahmoud Abbas called on Prime Minister Binyamin Netanyahu on Thursday to return to the negotiations table and discuss the two-state solution based on the 1967 borders, Channel 2 reported.

In an interview set to air Friday on Channel 2, Abbas also vowed that as long as he is PA president, there will be no third intifada.

“We don’t want to use terror; we don’t want to use force,” Abbas said. “We want to use diplomacy and negotiations.”

A day earlier, Netanyahu discussed with French President François Hollande the need to rekindle the long-frozen peace talks.

Netanyahu said he would be happy to meet Abbas in Paris.

“I am willing to go to negotiations right away without any preconditions,” Netanyahu said.

“If you want to test that, then President Hollande can invite President Abbas to the Élysée, and I’m here, I’m ready. It will take him a day to get here. We can start. From my point of view, it’s immediate and without preconditions,” Netanyahu said at the press conference.