Prime Minister Binyamin Netanyahu said that Israel is considering releasing to the Palestinian Authority tax funds it has been holding since the PA was accepted as a member of the United Nations cultural agency last month, speaking to the Knesset Foreign Affairs and Defense Committee Monday.The decision to do so, he explained will be taken by the government. "Israel will explore the process and will take action in light of the (diplomatic) calm."RELATED:'Israeli withholding of tax funds incapacitating PA' Vice PM: Libya is new source for smuggled arms to Gaza "We have identified calm on the Palestinian side," Netanyahu explained, saying that the PA has stopped their unilateral diplomatic steps. "In the Security Council we didn't even need the [United States'] veto" to prevent the Palestinian bid for full UN membership, he added, saying that the quiet was in the Palestinians' interest.The prime minister also played down Palestinian talks aimed at reconciliation between rival parties Hamas and Fatah. "The talks are much more of a tactical and ceremonial process and there has been no concrete result [of the talks]."'Islamic wave' sweeping the regionSpeaking to the committee, Netanyahu also warned that an "Islamic wave" is washing over the Arab world. "This is not good for us."Following decades of military rule in the Arab world, "We have an unstable reality ahead of us," he added Because it is not possible to know how long it will take until the region stabilizes, the prime minister said, "We must behave cautiously. This is not the time for hasty actions."In post-Gaddafi Libya, he said, "there is a large stockpile of weapons that is leaking out (of the country) and reaching our area," something he said has ramifications on Israel's security needs.Addressing the situation in Egypt, which on Monday began holding its first parliamentary elections since the fall of former president Hosni Mubarak, Netanyahu said, "We hope to stabilize the peace treaty and we are working on that with the Americans."