The cabinet on Monday decided not to renew the transfer of tax revenues to the Palestinian Authority, which were frozen two weeks ago in response to the Palestinian acceptance into UNESCO.

The vote to continue the freeze narrowly passed, according to a government official. The funds, which are collected by Israel on imports on behalf of the PA, amount to about $100 million each month.



The move comes as representatives of the Quartet are in Israel for meetings with both Israeli and Palestinian government officials in an effort to restart peace talks between the sides.

Prime Minister Binyamin Netanyahu's envoy Yitzhak Molcho was meeting with Quartet representatives in Jerusalem.

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Israel has used the transfer of taxes to the PA as a punitive measure in the past, causing financial crises in the Palestinian Authority. The defense establishment has been particularly opposed to the halting of PA funding because it partially pays the salaries of Palestinian security forces, who it says help maintain calm in the West Bank.

In addition to stopping the tax transfers, Israel also authorized the construction of 1,650 homes in east Jerusalem Jewish neighborhoods and 327 homes in two West Bank settlements in response to the Palestinian UNESCO bid.

That move drew international condemnation.

Reuters contributed to this report.

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