Israel deducts more Palestinian money over prisoner pay

Israel said Sunday it would withhold millions more dollars worth of tax money it collects on behalf of the Palestinian Authority, saying the amount equals payment made to families of Palestinian attackers.

Palestinian official media denounced the move as a "new theft," but the Israeli defence ministry called it a "freeze".

"The security cabinet voted in favour of Defence Minister Naftali Bennett's request to freeze 150 million shekels in taxes paid to the Palestinian Authority (PA) (around $43 million)," the defence ministry said in a statement.

Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports, and then it transfers the money to the PA.

In February, Israel began withholding around $10 million a month, saying the amount corresponded to that which the PA paid to families of Palestinians jailed for attacks against Israelis.

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Sunday's move will also include the families of Palestinians killed during anti-Israeli attacks.

Israel says payments to those who have carried out attacks against Israelis create financial incentives to encourage further violence.

Palestinians see many of those involved as resisting Israel's occupation and say the payments supports families who have often lost their main breadwinner.

The cut in February prompted a crisis between Israel and the PA, with the Palestinians saying they would refuse to receive any of the funds.

In October they backed down and agreed to take the reduced amount.