Israel on Monday unblocked close to half a billion dollars it confiscated from Palestinian tax revenues since the beginning of the year, the Palestinian Authority said.

The Palestinian finance ministry said it received 1.8 billion Israeli shekels (about USD 450 million) and would from Wednesday pay December and January salaries to 180,000 civil servants, who have been on 60 per cent pay.

The Palestinians had threatened to turn to the International Criminal Court over Israel's decision in early January to retain the taxes in retaliation for the Palestinians joining the International Criminal Court.

Under an economic agreement signed in 1994, Israel transfers to the PA tens of millions of dollars each month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports.