Tel Aviv has decided to deduct some $138 million from the amount of taxes it collected on behalf of Palestine. It comes in retaliation to stipends the Palestinian Authority pays to families jailed over violent anti-Israeli crimes.

The move was announced by the Security Cabinet of Israel on Sunday, as it decided to put into effect a law, passed by the country’s parliament last July.

The legislation allows Israel to freeze and deduct funds from Palestinian tax revenues, equal to stipends the Palestinian authorities pay to families of those jailed by Tel Aviv and former prisoners. Last year, some $138 million was paid to such people, according to Israeli data.

While Palestine sees the stipends as a welfare program for the heroes of its national struggle, Israel – as well as the US – considers it to be money to foster “terrorism.”

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Despite the Israeli move, the Palestinian authorities seem to be adamant to continue the payments, condemning Tel Aviv’s decision as “piracy” and “theft.”

“It is an attempt to pressure us and blackmail us,” Wasel Abu Youssef, an official with the Palestine Liberation Organisation (PLO), told Reuters. “Even if left with just one dollar, we will pay it to the families of the martyrs, of the prisoners and of the wounded.”

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