The Israeli government has been given the green light to deduct approximately $300m a year from the budget of the Palestinian Authority.
Israeli politicians passed a law allowing the money to be taken from taxes and tariffs that the Israeli government collects on the Authority's behalf.
Israeli politicians say the Palestinian leadership paid $350m last year to Palestinian prisoners jailed for attacking Israeli security forces, and their families.
Al Jazeera's Harry Fawcett reports from the Occupied West Bank.
