Israel's finance minister says Israel will be hurt economically by growing international isolation if it fails to reach a peace deal with the Palestinians.
Yair Lapid says his ministry has run through various scenarios and found that "a continuation of the existing situation will hurt the pocketbook of each of us."
Lapid spoke to the Israeli news website Ynet in response to an announcement Friday that Israel plans to build 1,400 more homes in Jewish settlements in the West Bank and east Jerusalem, territories the Palestinians seek for a state.
Lapid says the announcement is harmful at a time of ongoing Israeli-Palestinian negotiations. He warned that "if we don't make progress with the Palestinians, we will lose the sympathy of the world and that's our legitimacy."