Israel warns that it will cut the Palestinian tax transfer if the killer's family is paid

JERUSALEM (Reuters) – Finance Minister Moshe Kahlon announced on Friday that Israel would reduce tax revenues it transfers to the Palestinian Authority if it pays the family of the murderer of a US-Israeli settler.

Kahlon said he ordered that any money paid to the attacker's family be withheld from the tax revenues that Israel collects on behalf of the Palestinian Authority (PA) under interim peace agreements.

"I will look at other ways to limit the economic activity of the terrorist's family," he said on Twitter.

Ari Fuld, a 45-year-old American, was stabbed Sunday at a shopping center in Etzion Block, south of Jerusalem. His attacker, 17-year-old Khalil Youssef Jabarin, from a village in the occupied West Bank, was shot dead on the scene and has since been detained by Israel.

According to a Palestinian official, it has not yet been decided whether Jabarin and his family will receive payments.

Israel has in the past withheld tax funds and enacted in July a law aimed at penalizing the Palestinian Authority financially by the amount of allowances paid to Palestinians imprisoned by Israel, their families and the families of the victims of Israeli forces.

Israel says these allowances are a reward and encouragement for the actions of the prisoners against it. The Palestinian Authority claims that these are social benefits to support themselves and their families.

The Palestinian Authority, which has limited autonomy in the West Bank, where Israel retains full control of security, pays an allowance starting at NIS 1,400 ($ 392) after an inmate has been detained for three months. The amounts differ according to the length of the sentence.

Earlier this year, US lawmakers enacted legislation to dramatically reduce the $ 300 million in US aid to the Palestinian Authority unless it takes steps to reward violent crime.