The plans include 3,000 more homes for Jews in the West Bank and east Jerusalem, as well as preparations for construction of an especially sensitive project near Jerusalem, known as E-1.
Separately, Israel is moving forward with two major settlement projects in east Jerusalem. Israel would build more than 4,200 apartments in the two areas, Ramat Shlomo and Givat Hamatos.
Israeli settlement construction lies at the heart of a four-year breakdown in peace talks, and was a major factor behind the Palestinians' U.N. statehood bid. Since 1967, half a million Israelis have settled in the West Bank and east Jerusalem.
The Israeli plans for Jerusalem and nearby West Bank areas "are the most dangerous in the history of settlement expansion and apartheid," Abbas and senior members of the PLO and his Fatah movement said in a statement after a meeting Tuesday evening.
The Palestinians decided to ask the Security Council for a resolution censuring Israeli settlement building, even though a previous attempt in early 2011 was derailed by a U.S. veto.
The Palestinians say E-1 and Givat Hamatos are particularly problematic because they would cut off east Jerusalem, the intended Palestinian capital, from the rest of the West Bank.
Israel's plans for E-1 and Givat Hamatos "will leave us with no peace process," Saeb Erekat, a senior Abbas aide, told The Associated Press.
He later told Israel TV that "it's over" if these two settlements are built.
"Don't talk about peace, don't talk about a two-state solution ... talk about a one-state reality between the River Jordan and the Mediterranean," Erekat said, referring to the land that the international community hopes will one day accommodate both Israel and a Palestinian state.
British Foreign Secretary William Hague sounded a similar warning Tuesday, telling Britain's parliament that Israel's building plans would make a Palestinian state alongside Israel "almost inconceivable."
Eight countries, Britain among them, summoned local Israeli ambassadors in protest since Monday, and Hague said there could be further diplomatic steps if building continues.
Some Palestinian officials have raised the possibility of asking the European Union to reconsider its trade agreements with Israel, but Hague said he did not think Europe is ready for economic sanctions against Israel.
Israel has rebuffed the international criticism, which put it at odds with some of its strongest foreign allies, including Australia.
Israeli Foreign Minister Avigdor Lieberman said Tuesday that construction plans would move forward, particularly in east Jerusalem and nearby West Bank settlements. "Israel makes decisions according to its national interests, and not in order to punish, fight or confront," he said.
U.N. recognition could enable the Palestinians to gain access to the International Criminal Court and seek war crimes charges against Israel for construction of settlements on occupied lands.
Last week, before Israel's announcement of the new settlement plans, Abbas said that he's not turning to the ICC "unless we were attacked," and Palestinian officials portrayed an appeal to the court as a step of last resort.
However, Abbas said Tuesday that "no one can keep quiet about the issue of settlement in E-1," adding that if Israel keeps building, "it definitely does not want to reach a peace agreement."
Actual construction in E-1 would be years away even if the planning process is pushed ahead now.
The Palestinian representative to the United Nations, Riyad Mansour, wrote to the U.N. chief and the heads of the Security Council and the General Assembly late Monday that Israel's construction constitutes a war crime.
The letter made no mention of possible ICC action, which in any case would first require a series of steps by the Palestinians and the court.
A Palestinian case at the ICC could also expose Abbas' main Palestinian rival, the Islamic militant Hamas, to possible war crimes charges for its indiscriminate rocket fire from Gaza on Israel.
Hanan Ashrawi, a senior PLO official, said the Palestinians were encouraged by the recent diplomatic sanctions against Israel, but that the international community must go further.
Among other steps, she said the European Union should reconsider its association agreement with Israel that grants the Jewish state considerable trade benefits. She said the EU should also take harsher measures against products from Israeli settlements.