US Treasury Secretary Janet Yellen expressed on Thursday her concern about Israel's threat to cut ties between Palestinian banks and Israeli correspondent banks, a step that could close a vital artery that feeds the Palestinian economy.

Yellen added in prepared remarks before a meeting of finance ministers from the major G7 countries in Italy on Thursday that the United States and its partners “need to do everything in their power to increase humanitarian assistance to the Palestinians in Gaza, to contain violence in the West Bank, and to seek economic stability in the West Bank.”

The Israeli Finance Minister indicated the possibility of not renewing an exemption that expires on July 1 that allows Israeli banks to handle payments in shekels for services and salaries linked to the Palestinian Authority.