Palestinians strongly condemned on Tuesday a new Israeli law that freezes money transfers to the Palestinian Authority over welfare payments given to attackers and their families.
The legislation was approved late Monday and gives the Israeli government powers to withhold an amount of money based on what is paid to the prisoners and their families by the PA.
Israel collects around $127 million a month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports, and then transfers it to the PA.
The move threatens the existence of the PA and amounts to "theft", said Saeb Erekat, secretary general of the Palestine Liberation Organization.
"This is a very dangerous decision that amounts to the cancellation of the Palestinian Authority and is piracy and theft," Erekat told AFP.
"Israel is stealing the land and money of the Palestinian people, and that is a result of the decisions of (US) President (Donald) Trump, who supports Israel."
"The Palestinian Authority is responsible for all Palestinians and is responsible for the families of prisoners and martyrs within the program of social assistance," he said.
Both he and a spokesman for Palestinian President Mahmoud Abbas called it a "dangerous decision".
Abbas spokesman Nabil Abu Rudeina said the Palestinian leadership was planning a response to the move, which he said would cross "one of the red lines" if implemented.
According to a sponsor of the legislation, the PA pays around $330 million a year to prisoners and their families, accounting for seven percent of its budget.
The Knesset, Israel's parliament, approved the law with 87 of the house's 120 lawmakers voting in favor of the bill while 15 opposed it. The remaining lawmakers were absent.
Israeli Defense Minister Avigdor Lieberman hailed the new law, saying: "Every shekel Mahmoud Abbas will pay for terrorists and assassins will be automatically withdrawn from the Palestinian Authority's budget.
Arab lawmakers railed against the bill ahead of the vote. Jamal Zahalka, of the Joint List of Arab parties, said the bill was "despicable".
The Israeli law passed the same day that Australia said it ended direct aid to the PA, claiming Australian donations could increase its capacity to pay Palestinians convicted of politically motivated violence.
US legislation that became law in March also withholds some aid to the Palestinian leadership over the payments to prisoners' families and the families of those killed while carrying out attacks.
The law, known as the "Taylor Force Act", is named after a US military veteran and graduate student who was killed in a 2016 attack while he was visiting Israel.
