BEIRUT - Syria's Foreign Minister Walid al-Mouallem said on Monday the Arab League's decision to halt dealings with the Syrian Central Bank was a "declaration of economic war."

Mouallem also told a televised news conference that Syria had already withdrawn 95 percent of funds targeted by the League's decision that Arab states freeze Syrian government bank assets.

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"Sanctions are a two-way street. I am not warning here, but we will defend the interests of our people... We have to defend the interests of our people," Mouallem said.

Amid the defiance, Mouallem also presented a concession, telling reporters that Syria plans to drop a constitutional clause which designates President Bashar al-Assad's Baath Party as the leading party.

Mouallem said he was told by the head of a committee tasked with reforming Syria's constitution that the revised version "includes multi-party (politics), and there is no place for discrimination between parties, meaning there is no Article Eight."

But Moallem warned that the League's decision to impose sanctions closed off attempts to reach a deal to end eight months of violence.

"Yesterday, with the decision they took, they closed these windows," he said.

Neighboring Lebanon sided with Syria in the spat, splitting from the rest of the Arab League and saying it will not implement the economic sanctions. Lebanese Foreign Minister Adnan Mansour told Reuters on Monday it would not participate in sanctions because it had not agreed to them and believed they could hurt Lebanon.

"We do not agree with these sanctions and we will not go along with them," Mansour said.

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