Palestinian Prime Minister Mohammad Shtayyeh on Monday described a raft of Israeli measures as a "new war" against the Palestinian Authority aimed at pushing it "to the brink".
Israel's new right-wing government said Friday it will withhold millions of dollars in tax revenues from the Palestinian Authority (PA).
This followed the Authority's successful lobbying for a UN General Assembly vote referring Israel's occupation of the Palestinian territories to the International Court of Justice.
The Palestinian premier said the retaliatory measures amounted to "a new war against the Palestinian people, their capabilities and their funds, and a war against the national authority (PA) and its survival."
Such sanctions were "aimed at undermining the authority and pushing it to the brink -- financially and institutionally," Shtayyeh said at the start of a weekly cabinet meeting.
The deductions amount to around $40 million, which the Israeli government said will be distributed to "families of victims murdered in Palestinian terrorist attacks".
Israel has repeatedly withheld tax and customs revenues it collects on behalf of the PA, particularly in response to the body making payments to the families of Palestinians killed by Israeli forces or during attacks on Israelis.
Discussing the move on Sunday, Israeli Finance Minister Bezalel Smotrich warned the cash-strapped PA "will have to decide if it wants to continue existing."
"As long as the PA encourages terror and is an enemy, what interest do I have in helping it continue to exist?" Smotrich said at a press conference.
The Israeli government also ordered a moratorium on Palestinian construction plans in the largest part of the West Bank, which Israel has occupied since the 1967 Six-Day War.
As a further step, Israel revoked VIP passes for several officials, including Palestinian foreign minister Riyad al-Maliki, which had allowed them to enter Israel and pass through the country's international airport in Tel Aviv.
