Mahmoud Abbas. Photo: World Economic Forum.

In response to the unilateral Palestinian UN status upgrade, Israel has announced that it will withhold Palestinian tax revenue.

Israel’s Finance Minister Yuval Steinitz said that the Israeli government will withhold approximately $100 million in taxes and customs collected monthly on behalf of the Palestinian Authority (PA). According to Steinitz, the withheld revenue will be used to pay off debt owed to Israel by the PA for unpaid electricity charges. It is unclear if Israel will withhold future transfers.

“The provocation is a Palestinian provocation, an effort to advance the establishment of a [Palestinian] state without recognizing Israel, without demilitarizing and without proper security arrangements,” Steinitz said in an Israeli Cabinet meeting, according to Israel Hayom.

“We warned that we would respond. I do not plan to transfer funds this month. I will subtract the sum from their debts,” Steinitz added.

Israel’s collection and transfer of Palestinian tax revenue is part of agreements signed by Israel and the PA under the Oslo Peace Accords. Israel maintains that unilateral Palestinian action violates these agreements and threatens the peace process.