Palestinian leader will refuse Israeli tax transfers Palestinian President Mahmoud Abbas says he will not accept a monthly tax transfer from Israel if it carries out its decision to deduct amounts the Palestinians pay to the families of prisoners and people killed in fighting with Israel

RAMALLAH, West Bank -- Palestinian President Mahmoud Abbas on Wednesday said he will not accept regular monthly tax transfers from Israel if it carries out its decision to deduct amounts the Palestinians pay to the families of prisoners and people killed in fighting with Israel.

Abbas accused Israel of trying to put political pressure on him and violating longstanding economic agreements. He said it would be the "final nail in the coffin" of those agreements and said he would not accept the funds if even "one penny" is deducted.

The monthly tax transfers cover about two-thirds of the Palestinian budget. Without those funds, Abbas' autonomy government will fall into a crisis and not be able to pay full salaries to its tens of thousands of employees.

Abbas appears to be hoping that this doomsday scenario will pressure Israel to back down.

Israel said this week that it will withhold over $138 million in revenues that it says the Palestinians used as stipends for Palestinian attackers and their families.

Israel says such payments encourage violence — a charge the Palestinians deny.

Palestinian officials say just a small number of the people were involved in attacks, and that they have a responsibility to assist all citizens.