Top Palestinian Authority officials on Tuesday slammed a new Israeli law that will deduct funds to the Ramallah government equivalent to the amount the PA pays out to convicted terrorists and the families of Palestinians killed while carrying out attacks.

Saeb Erekat, secretary general of the Palestine Liberation Organization, said the move threatened the existence of the cash-strapped Palestinian Authority.

The Knesset passed the legislation — supported by both coalition and opposition MKs — in a 87 to 15 vote late Monday night. According to the law, the value of welfare payments paid out by the PA to Palestinian prisoners and their relatives will be deducted from tax revenues Israel transfers annually to the administrative body.

Get The Times of Israel's Daily Edition by email and never miss our top stories Free Sign Up

“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.”

PA spokesperson Nabil Abu Rudeineh also railed against the new law Tuesday, saying Israel crossed a “red line” with the legislation and that the measure amounted to a “declaration of war on the Palestinian people.”

Warning that the legislation would have “serious repercussions,” Abu Rudeineh said that Palestinian leadership would convene soon to formulate a response “that would change the nature of the existing relations” between Israel and the PA.

Israel has long accused the PA of encouraging terror attacks against Israelis by rewarding perpetrators and their families with monthly stipends, and on occasion has withheld millions of dollars in Palestinian tax revenues over Ramallah’s unwillingness to change the controversial policy.

But the Western-backed PA government has refused to cease its payments to the families of attackers and prisoners that Abbas this year hailed as “victims of the occupation.”

The sponsors of the law — Likud MK Avi Dichter and Yesh Atid MK Elazar Stern — said the legislation would send a message to Palestinians that terror does not pay.

“The PA turned itself into a factory that employs murderers [of] Jews mostly but also Muslims, Christians, Druze, Circassians, and others, including tourists,” Dichter said ahead of the vote.

He said the law is meant to send a “moral and principled message” that Israel will not assist in sending money to terrorists, as well as to cause the PA to rethink its policy of “encouraging terror.”

Defense Minister Avigdor Liberman on Tuesday hailed the passing of the new law, saying that “every shekel Mahmoud Abbas will pay for terrorists and assassins will be automatically withdrawn from the PA’s budget.”

“An effective war on terrorism also passes through the pocket — of the terrorists, of their families and of Mahmoud Abbas,” he said.

According to the Defense Ministry, the PA in 2017 paid NIS 687 million ($198 million) to the so-called “martyrs’ families fund” and NIS 550 million ($160 million) to the Palestinian Prisoners’ Club — some 7 percent of its overall budget.

Palestinian prisoners serving 20- to 30-year sentences for carrying out terror attacks are eligible for a lifetime NIS 10,000 ($2,772) monthly stipend, the Defense Ministry said, citing PA figures. Those prisoners who receive a three- to five-year sentence get a monthly wage of NIS 2,000 ($554). Palestinian prisoners who are married, have children, live in Jerusalem, or hold Israeli citizenship receive additional payments.

The Defense Ministry last month released figures alleging that some terrorists who killed Israelis will be paid more than NIS 10 million ($2.78 million) each throughout their lifetimes by the PA.

Raoul Wootliff and AFP contributed to this report.