Israel has reportedly stopped transfers of the tax revenue it collects on behalf of the Palestinians under the current interim peace accords to register protest against their decision to join the International Criminal Court (ICC) in Hague.
December's tax transfer amounted to about 127 million dollars, reported The Guardian.
The Palestinians announced earlier this week that they are joining the ICC to pursue war-crimes charges against Israel. The move was aimed at persuading the nation to withdraw from the territories that are being demanded by Palestinians for a future state.
The decision has sparked retaliation in Israel and elicited criticism from the United States, which termed it "counterproductive."
Prime Minister Benjamin Netanyahu is scheduled to convene a cabinet meeting in the coming days to discuss further retaliatory steps, the report said.