"There will be no negotiations without international legitimacy and a complete halt to settlements," Abbas, the authority's president, said to a hero's welcome at his presidential compound in Ramallah, West Bank, Sunday two days after seeking full membership for a state of Palestine in the United Nations.
Israel said it would consider economic measures if the Palestinian National Authority continued to pursue its U.N. application and if it put conditions on returning to the negotiating table.
Abbas' comments made no acknowledgment of a proposal for new peace talks offered by the United States, the United Nations, Russia and the European Union -- known together as the Quartet -- shortly after he submitted the U.N. membership bid.
The proposal called for direct talks to begin within a month without preconditions and for a final deal to be reached before the end of 2012.
The joyous West Bank scenes for Abbas, of the Fatah political party, were contrasted by near-silence in the Gaza Strip, where the ruling Hamas movement opposed the U.N. bid and stymied celebration rallies, al-Jazeera reported.
Lebanon's U.N. ambassador said the Security Council would discuss Abbas' application at 3 p.m. EDT Monday.
Abbas said he expected the council would finish debating his application within weeks, not months, as earlier forecast.
Palestinians want to establish a state on land Israel captured in the 1967 Arab-Israeli war in the West Bank and Gaza Strip, with East Jerusalem as the capital.
Israeli Finance Minister Yuval Steinitz called the Palestinian statehood bid a "betrayal" of the peace process. He said Israel would consider taking punitive economic steps, such as delaying its monthly transfer of tax funds to the authority, if the authority continues to its moves and refuses to return to the negotiating table.
"It is impossible to think that we will continue to help and to cooperate with the Palestinian authorities and the economy like nothing happened," he told The Jerusalem Post in New York Sunday.
Israel sees the U.N. bid as an attempt to erode its own legitimacy. Abbas argues statehood would put Palestinians on a more equal footing with Israel.
Israeli Prime Minister Binyamin Netanyahu told Abbas through NBC's "Meet The Press" Sunday, "If you want to get to peace, put all your preconditions to the side," a reference to the Palestinians' demand for a settlement freeze.
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