Dr. Hanan Ashrawi, a member of the Palestinian Liberation Organization's executive committee, made the comments while touring the Israeli neighborhood of Gilo in western East Jerusalem Wednesday.
Palestinians view Gilo as an illegal Israeli settlement built on Palestinian land. Israel, however, says the neighborhood, which was built on land annexed to Israel after the 1967 war, is part of Jerusalem and not a settlement.
Ashrawi's comments came a day after Israeli and Palestinian negotiators reportedly met for peace talks in Jerusalem.
"Gilo is an illegal settlement built on Palestinian land by force of occupiers' power and not by any legal political agreement. ... It is also an attempt to destroy the very foundation of peace and prevent the implementation of the two state solution," the Palestine News Network quoted Ashrawi as saying.
If Israel persists in such policies the Palestinians will have no other options but to approach international judicial bodies, she said.