The government filed a petition to an American federal court to block the testimony of the former official, who could have tipped the scales. The case was filed by families of victims of suicide bombers who accuse the Bank of China of facilitating terrorist funding via accounts in the US.
The Associated Press obtained a copy of the petition today.
Critics say Israel is acting out of fear that the testimony could jeopardise valuable trade ties with China. Nitsana Darshan-Leitner, a lawyer representing the families, said the decision sent a message "that Jewish blood is cheap.