Economic sanctions implemented by Israel against the Palestinian Authority could backfire, top IDF officials warned Monday, saying the pushback from the Palestinian street could lead to unrest, or even an uprising in the West Bank.

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Israel is currently holding NIS 2.5 million in Palestinian Authority tax funds, a move it took in retribution for unilateral Palestinian actions in the diplomatic arena, like their attempt to attain statehood through a UN Security Council resolution and their accession to the Rome Statute, which cleared the way for an inquiry into alleged Israeli war crimes at the ICC.

Rioting in the West Bank (Archive: AP)

Ynet has learned that IDF officials have recently presented the political echelons with the possible security ramifications for Israel's economic sanctions. According to army officials, growing economic tensions in the Palestinian market in the West Bank served as a catalyst for riots and even terror attacks, breaking the relative calm the West Bank has enjoyed in recent years.

The IDF even said they took a number of steps to mitigate the economic fallout of the decision, which has seen half a million NIS frozen per month, by easing restrictions on the Palestinians. The procedures were authorized by the political echelon, IDF officials said.

For example, the IDF increased work visa quotas for Palestinians, allowing scores to join the close to 130,000 Palestinians who make their livelihood in Israel (some 30,000-40,000 without work permits).

However, this did little to avail economic tensions, and the Palestinian Authority, which is the West Bank's main employer, has shifted to emergency mode, paying workers only 60 percent of their salaries -- in addition to cutting services across the board.

Palestinian President Mahmoud Abbas (Photo: Reuters)

Meanwhile, the IDF are preparing for a possible escalation in the West Bank, both spontaneous and organized. The different scenarios include multi-site riots involving thousands of protesters, some armed, throughout the West Bank; simultaneous terror attacks; kidnapping and infiltration attempts; and a possible end to security coordination with the Palestinians, which they say is very unlikely, though a number of such cases have happened at a local level.

Though IDF say coordination will continue, if only because it is in the Palestinians' interest to maintain control over its areas in the West Bank and to be able to present itself as the legal representative of the Palestinians, and not as a terror organization. The Palestinian Authority wants to avoid bolstering Hamas (currently said to be backed by roughly half of the Palestinian population).

IDF soldiers during a drill in Hebron (Photo: IDF Spokesman)

They also fear Hamas involvement in the West Bank, and other attempts by young Tanzim – a militant offshoot of Fatah -- supporters to set up terror cells in the area. Those youths, they say, are no longer bound by the "Prisoners Commitment" which prevents PLO officials from returning to the ways of terror. In Nablus, security forces rounded up some of these youths, especially in the Lata refugee camp.

These security forces now number 30,000 Palestinian police officers and soldiers, 8,000 of which are armed with automatic rifles. Israel fears there are those who will attempt to use these arms to launch rogue terror attacks, despite their Palestinian commander's objections.

The IDF's West Bank Division has run an unprecedented series of drills over the last few weeks to prepare for any escalation. The drills simulated the takeover of Palestinian towns, among other scenarios.

The extensive drill involved all command levels, from battalions to the General Chief of Staff.