Israel has reportedly transferred some £117 million worth of Palestinian taxes to the Israel Electric Corporation rather than to the Palestinian Authority (PA).
The move is designed to punish the PA for paying benefits to the families of Palestinians held in Israeli prisons.
It’s also meant to pressure the PA into signing up to a deal that would hand more land to Israel.
Israel collects taxes on behalf of the PA as part of the failed 1993 Oslo agreement that was supposed to create a Palestinian state.
But Israeli governments have proved a two-state solution—a Palestinian state next to Israel—impossible by building on occupied Palestinian and making sure negotiations broke down.
It wants to force the PA into agreeing to a deal that abandons Palestinian statehood altogether. Its government agreed last year to freeze and deduct funds passed to the PA, hoping to push it into economic crisis.