Heat oven to 350°F. In small bowl, combine flour and salt.
In large bowl, beat butter, sugar and egg yolk until smooth. Beat in vanilla; stir in flour mixture. Flatten dough into a disk; Refrigerate 1 hour.
Roll 2 teaspoons dough into 6-inch rope. Transfer to nonstick baking sheet; curve into candy cane shape. Repeat with remaining dough. Bake at 350°F for 12 minutes. Cool on pan 1 minute, then carefully transfer to rack with a thin metal spatula.
Prepare Royal Icing. Remove 1/2 cup thicker icing to a small bowl and tint red; remove 1/2 cup thicker icing to a small bowl and tint green. Use a small clean brush to "paint" thinned white icing over cookies. Let dry. Transfer colored icings to two pastry bags fitted with small round tips. Pipe lines on cookies; let dry.