Story highlights The funds total about $100 million a month, Palestinian officials say

Israel withheld the money in retaliation for Palestinian statehood efforts at the U.N.

Israel's defense minister says Palestinians are backing off some U.N. efforts

Palestinians called on the international community to pressure Israel

Israel will release tax money that it was withholding from the Palestinian Authority, Israel's defense minister said Monday.

The Israeli government was holding onto the money as punishment for Palestinian efforts to gain statehood recognition at the United Nations.

Palestinian Authority spokesman Ghassan Khatib said the tax funds total about $100 million a month, and have been withheld for two months.

Speaking at a meeting of his Independence Party, Israeli Defense Minister Ehud Barak said the funds "are a part of the contribution to the stability of the Palestinian Authority and its security services in particular. "

Given "changes in the circumstances and the fact that the Palestinians are backing off from some of their unilateral moves at the U.N.," Barak said, "it is a right opportunity to put this thing behind us and transfer the funds."

It was not immediately clear why Barak said Palestinians were backing off some efforts.

Israeli Foreign Minister Avigdor Liberman, at a meeting of his Yisrael Beiteinu Party, spoke out against releasing the money. "We will do everything possible in order for this money not to go through," he vowed.

Lieberman cited reports that Palestinians plan to give prisoners who were freed in exchange for Israeli soldier Gilad Shalit up to $5,000 a month as well as free housing. "They say this money goes as salary to security services. It is a complete lie," Liberman said. "This money goes to murderers and to incitement to murder. "

"There is not one Palestinian policeman who enjoys the same prestige as that of a terrorist who was recently released," he added.

Israel released more than 1,000 prisoners in exchange for Shalit.

Over the weekend, Palestinian Foreign Minister Riyad Malki called the withholding of tax revenues a violation of international law and Palestinian-Israeli agreements, according to official Palestinian news agency WAFA.

Palestinian Authority spokesman Khatib said much of the money is used to pay about 160,000 Palestinian workers and officials.

In a statement Monday before Barak's announcement, Palestinian Prime Minister Salam Fayyad called on the international community to pressure Israel to transfer the tax money.

"How are we to believe that there is a serious political process that seeks to put an end to occupation and enables Palestinians to self-determination and establishment of their independent state?" he said.

Palestinian leaders had no immediate response to Barak's announcement Monday.