Saeb Erekat
Saeb ErekatReuters

A top Palestinian Authority official on Tuesday strongly denounced a new Israeli law that will freeze money transfers to the Palestinian Authority to punish its payments to the families of jailed and slain terrorists.

Saeb Erekat, secretary general of the Palestine Liberation Organization, said the move threatened the existence of the cash-strapped Palestinian Authority.

The legislation was approved late Monday and gives the Israeli government powers to withhold from the PA an amount of money based on what is paid to jailed terrorists or and the families of terrorists killed during attacks.

Israel collects around $127 million a month in customs duties levied on goods destined for Palestinian Authority markets that transit through Israeli ports and then transfers it to the Palestinian Authority.

"This is a very dangerous decision that amounts to the cancellation of the Palestinian Authority and is piracy and theft," Erekat told AFP.

"Israel is stealing the land and money of the Palestinian people and that is a result of the decisions of President (Donald) Trump, who supports Israel."

A sponsor of the legislation says the PA pays around $330 million a year to prisoners and their families, amounting to seven percent of its budget.

US legislation that became law in March also withholds some aid to the Palestinian Authority over the payments to terrorists’ families and the families of those killed while carrying out terror attacks.

The law, known as the "Taylor Force Act," is named after a US military veteran and graduate student who was killed in a 2016 attack while he was visiting Israel.

Israeli Defense Minister Avigdor Liberman hailed the passing of the new law, saying: "Every shekel (president) Mahmoud Abbas will pay for terrorists and assassins will be automatically withdrawn from the Palestinian Authority's budget.

"An effective war on terrorism also passes through the pocket -- of the terrorists, of their families and of Mahmoud Abbas."

Israel has withheld payments in the past, notably in response to the Palestinian Authority's 2011 admission to the UN cultural agency UNESCO as a full member.