JERUSALEM (AP) _ A U.N. Security Council statement criticizing Israel for seeking to expand Jerusalem's boundaries will not deter Israel from going through with the plan, a Palestinian Cabinet minister said today.

The Palestinians had hoped the 15-member council would adopt a binding resolution condemning Israel, although the United States likely would have vetoed such a move, thus blocking it.

Instead, the council approved a compromise statement Monday that calls Israel's Jerusalem plan ``a serious and damaging development'' and urges Israel not to proceed with it.

Israel's Foreign Ministry said in a statement it regretted the Security Council decision and insisted its Jerusalem plan was municipal in nature and did not violate the Israeli-Palestinian peace agreements.

Under the Israeli proposal, adopted June 21, Jerusalem municipal authority would be extended to several Jewish West Bank settlements adjacent to the city.

Palestinian Higher Education Minister Hanan Ashrawi said today a Security Council resolution would have been preferable, even at the risk of inviting a U.S. veto, over a diluted compromise.

``It is unfortunate that once again the United States has deflected the work of the Security Council to dilute its position and come up with a non-binding statement,'' Ashrawi said.

The U.S. ambassador to the United Nations, Bill Richardson, has called the Security Council statement appropriate and said it sends the message of support for the Middle East peace process.