The Israeli military has blocked Palestinian agricultural exports through Jordan in the latest escalation of a months-long trade war that comes amid fears of renewed violence in the region over a controversial Middle East plan backed by the United States.

Following Defense Minister Naftali Bennett's instruction, the Israeli military said it would not allow the Palestinians to transfer their products through their land crossing to Jordan, the occupied West Bank's only direct export route to the outside world.

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The Western-backed Palestinian Authority said Israeli forces at checkpoints blocked vegetable shipments that were on their way to be exported abroad.

In a statement, the Palestinian Ministry of Agriculture said vegetable exports to Israel were worth $88m last year, comprising 68 percent of the occupied West Bank's overall vegetable exports.

"Yesterday, the director of Israeli crossings informed all exporters and all relevant parties that all Palestinian agriculture products would be banned from export to world markets through the Jordanian crossing starting Sunday," Palestinian Agriculture Minister Riyal al-Attari told Voice of Palestine radio.

The deputy Palestinian economic minister, Tariq Abu Laban, told the Palestinian news agency, WAFA, that the decision to ban the export of Palestinian goods was in response to the Palestinian government's decision to ban the import of Israeli calves.

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The crisis erupted in September when Palestinians decided to stop importing beef from Israel.

The Palestinian Authority claimed most of the 120,000 head of cattle they imported monthly from Israel were imported and that therefore, they preferred to import directly from abroad.

The move appeared to be aimed at reducing the Palestinians' economic dependence on Israel.

Shortly after the September announcement, Israeli cattle farmers saw a drop in their market and pressured Israeli authorities to take action.

Bennett retaliated with a ban on Palestinian beef and other products, triggering the Palestinians to expand their boycott, and stop importing Israeli vegetables, fruits, beverages and mineral water.

The Palestinians say their actions are aided at pressuring Israel into revoking its ban, while Israel says normal trade will be restored the moment the Palestinians reverse the cattle ban that started the crisis in the first place.

The trade crisis came amid a surge in violence following the release of US President Donald Trump's Middle East plan, which the Palestinians have emphatically rejected.

Ten days of protests against Trump's plan have seen at least five Palestinians killed by Israeli forces.