Palestinian Authority chief negotiator Saeb Erekat on Thursday dismissed reports Ramallah had offered to drop its bid to join United Nations agencies in exchange for Israel unfreezing tax revenue transfers to the cash strapped PA.
Israel froze tax revenues transferred to the PA under bilateral agreements -- amounting to some $100 million each month -- after it began a unilateral track proscribed by the Oslo Accords at the United Nations.
Jerusalem's decision to freeze tax revenues came when UNESCO voted to induct the PA as a full member state despite a failed application for recognition of statehood in the Security Council.
Erekat told the PA's semi-official Ma'an News the reported deal was "nonsense" and insisted the PLO would continue to seek full membership of the United Nations.
"This is nonsense and we are determined to apply for membership. We should stop dealing with Israeli propaganda."
PLO Executive Committee member Hanan Ashrawi also denied the report.
"This report is completely untrue, and the Israeli media tools are not the source of information for the Palestinian positions and decisions," she told Maan.
"The report is a new Israeli maneuver and an attempt to create confusion to stop the Palestinian bid to the UN."
Both Erekat and Ashrawi said PLO officials are determined to pursue their bid for full membership at the UN.
"The Palestinian government is still focusing on getting support from the Security Council," Erekat said.
For the PA statehood bid to succeed at the 15-member Security Council it must garner nine affirmative votes while avoiding a negative recommendation from the council's five permanent members.
The United States – a permanent member – has promised to scuttle the bid, rendering it a dead letter.
PA officials have said they intended to press ahead in order to embarrass the United States and demonstrate it is alone in its support for Israel – but have been unable to garner the nine votes needed to do so.
According to the reports in the Israeli press, Israeli Prime Minister Benjamin Netanyahu's special envoy Issac Molho met secretly with US representatives in London to discuss the offer.