Israel will stop collecting tax revenues for the Palestinian Authority and not hand over any money if President Mahmoud Abbas continues to seek observer state membership of the United Nations, Finance Minister Yuval Steinitz said on Saturday.
"If the Palestinians continue to advance their unilateral move they should not expect bilateral cooperation. We will not collect their taxes for them and we will not transfer their tax revenues," Steinitz said.
On Wednesday, the Western-backed Palestinian Authority circulated a draft resolution to UN member states that calls for upgrading its UN status to that of observer state, despite objections by the United States and Israel.
"It cannot be that they hit us unilaterally and then expect bilateral cooperation with us on economic matters," Steinitz told a town hall meeting in the southern Israeli city of Beersheba.