Palestine on Sunday said that it has referred Israel's latest settlement expansion plan to the International Criminal Court (ICC).

Saeb Erekat, secretary-general of the Palestine Liberation Organization (PLO), told reporters in the West Bank city of Ramallah that the recently announced Israeli plan to build new settlement units in East Jerusalem had been reported to the ICC.

Palestine is not interested in "revenge, but interested in finding justice" and halting the settlement activity, said Erekat.

Israeli Prime Minister Benjamin Netanyahu on Tuesday announced that he would advance a plan to build 3,500 new housing units in a settlement, known as the E1 project.

E1 is a controversial project that would connect the Israeli-annexed East Jerusalem and the rest of the West Bank.

The project was frozen in 2012 under international pressure and objections by world powers including the United States and the European Union.

Israel has repeatedly threatened to annex vast areas of the occupied West Bank, including Jordan Valley.