The Palestinians have moved into uncharted territory by bidding to join the International Criminal Court, analysts say, with the decades-old conflict with Israel now set to play out on the world stage.

After years of threats, the Palestinians finally turned to the ICC last month after the U.N. Security Council rejected a resolution setting a deadline for ending Israel's occupation of their lands.

The United States said Monday it opposes a move by Israel to freeze the transfer of tax revenues to the Palestinian Authority in retaliation for its bid to join the International Criminal Court.

"This step is one that raises tensions as others do," State Department spokeswoman Jen Psaki said.

Prime Minister Benjamin Netanyahu launched his re-election campaign on Monday with a pledge not to make any territorial concessions to the Palestinians that would harm Israel's security.

"In the coming elections, don't gamble with the security of Israel. Only Likud can ensure your security," he told activists of his rightwing party at a rally in Tel Aviv.

Israeli President Reuven Rivlin said on Monday he opposed a freeze in the transfer of taxes to the Palestinians in response to their application to join the International Criminal Court.

"Freezing taxes can be useful neither for Israel nor for the Palestinians," Rivlin told ambassadors accredited to Israel in a speech.

Israel does not intend to build its separation barrier through the lands of a Palestinian village south of Jerusalem renowned for its ancient irrigation system, court documents showed Sunday.

Residents of Battir, which straddles the Green Line, had in 2012 petitioned Israel's supreme court against defense ministry plans to build the barrier adjacent to and in places through their Roman-era terraces.

Israel was weighing its options Sunday for further punishing the Palestinians after freezing millions in tax revenues as a first response to their bid to join the International Criminal Court.

The Palestinian move to join the Hague-based court sets the scene for potential legal action against Israel for war crimes, in a bid to put pressure on Tel Aviv to pull out of the territories.

Israel is delaying the transfer of taxes it collects on behalf of the Palestinians in retaliation for their application to join the International Criminal Court (ICC), an official confirmed Saturday.

Israel is considering filing war crimes suits overseas against Palestinian leaders in response to their application to join the International Criminal Court and press such charges against the Jewish state, an official source said Saturday.

Legal proceedings at courts in the United States and elsewhere are being weighed against Palestinian president Mahmud Abbas, his Palestinian Authority and other senior officials, the source close to the government told Agence France Presse.

Militant group Hamas on Saturday condemned the fatal shooting by Egyptian border guards of what they said was a Palestinian minor on the Gaza border.

"We condemn the killing (Friday) of the child Zaki al-Houbi by Egyptian army gunfire on the borders, we consider what happened as a dangerous development and excessive use of force," the Islamist organisation said in a statement.

The Palestinian envoy to the United Nations on Friday formally requested membership in the International Criminal Court, which would allow war crimes complaints to be filed against Israel.

Membership of the Rome Statute, which governs the ICC, would open the way for Palestinians to pursue criminal complaints in The Hague, but is firmly opposed by both Israel and the United States.