Israel decided on Monday to withhold $90 million in Palestinian tax funds (clearance) and transfer them to Israeli families whose members were allegedly killed in attacks carried out by Palestinians, according to Hebrew media.

Channel 7, a private Hebrew channel, said that Israeli Finance Minister Bezalel Smotrich "signed today (Monday) the seizure of an additional amount of 320 million shekels (about 90 million dollars) from the Palestinian Authority's clearing funds, for the benefit of the families of victims of terrorism."

She added: "We are talking about another signature on withholding funds from the Palestinian Authority, which prevents it from continuing to reward terrorists and murderers (paying allowances to the families of Palestinian martyrs and prisoners), and transfers the Authority's funds to the victims of terrorism and their families" in Israel.

Clearance funds are the set of taxes and customs imposed on goods imported into the Palestinian side, whether from Israel or through Israeli border crossings (land, sea and air).

Since the signing of the Oslo Accords between the PLO and Israel in the 1990s, the Israeli Ministry of Finance has been collecting clearance funds and transferring them to the Palestinian side on a monthly basis, with a 3 percent deduction for the fees of the ministry’s staff.

The Israeli decision came despite Palestinian President Mahmoud Abbas issuing a presidential decree last week "cancelling laws and regulations related to paying allowances to the families of martyrs and prisoners in Israeli prisons" and referring them to a government institution.

The Palestinian government uses clearance funds primarily to pay the salaries of public employees, and they constitute 65 percent of the Palestinian Authority’s total financial revenues.

But starting in 2019, Israel decided to deduct 600 million shekels ($165 million) annually from the clearance funds, in exchange for the monthly allocations provided by the Palestinian Authority to prisoners and freed prisoners.

The annual figure for this deduction related to the allocations of prisoners and freed prisoners increased to an average of 700 million shekels annually ($195 million).

Since November 2021, the Palestinian Authority has been unable to pay the salaries of public sector employees at full rates, with the rate ranging between 50 percent and 90 percent of monthly salaries.

For his part, Smotrich claimed in a post on his account on the "X" platform that "there is no signature more moral and just than the signature that prevents the Palestinian Authority from financing terrorism, and transfers its funds to the families of terrorism victims."

He continued his allegations, saying, "This is a necessary step in our national war against terrorism and against the Palestinian Authority, which encourages it."

He continued: "This seizure is in addition to the process of deducting Gaza funds, freezing payments to terrorists, and a series of additional steps that I have taken in accordance with the strict policy that I have called for since I assumed my position."

Smotrich concluded by saying that he is working to "dry up the sources of funding for encouraging terrorism and not allowing the Palestinian Authority to exploit its funds to continue incitement and bloodshed."

On May 23, the World Bank warned that “the Palestinian Authority’s public finances have deteriorated sharply in the past three months, significantly increasing the risk of a public finance collapse.”