Ed: bearing in mind the illegal state of Israel is wholly funded by USA taxpayers - to the tune of about $1trillion over the last 60 years. This will never be paid back
Under interim peace deals, which Israel says the Palestinians violated by unilaterally seeking an upgrade of their status at the United Nations, it collects about $100-million a month in duties on behalf of the authority.
But, Israeli officials said on Sunday, the authority owes about $200-million to the Israel Electric Corporation, and that money will now be deducted from the tax transfers.
The cash-strapped authority, which exercises limited self-rule in the occupied West Bank, largely depends on the tax money to pay civil servants' salaries.
Yasser Abed Rabbo, a senior Palestinian official, said Israel was guilty of "piracy and theft" by refusing to hand over the funds. Israel has previously frozen payments to the body during times of heightened security and diplomatic tensions, provoking strong international criticism, such as when the UN cultural body Unesco granted the Palestinians full membership a year ago.