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Slideshow Sponsored Links Israel to withhold Palestinian funds until March Tweet Share this Email Print Related News Israel raids Palestinian NGO offices Tue, Dec 11 2012 Hamas's Gaza jubilation proves Israel is at risk: Netanyahu Sun, Dec 9 2012 Arabs offer Palestinians $100 million a month "financial safety net" Sun, Dec 9 2012 King of Jordan visits West Bank to congratulate Abbas Thu, Dec 6 2012 Israel pushes settlement plan ahead; EU summons envoy Wed, Dec 5 2012 Analysis & Opinion A two-state Middle East solution hangs in the balance as Obama waits Obama faces only hard choices in Mideast Related Topics World » United Nations » Israel » Middle East Turmoil » JERUSALEM | Wed Dec 12, 2012 1:45am EST JERUSALEM (Reuters) - Israel will withhold tax revenues from Palestinian President Mahmoud Abbas's administration until March at least in response to his statehood campaign at the United Nations, Israel's foreign minister said. Under interim peace deals, Israel collects some $100 million a month in duties on behalf of the Palestinian Authority (PA) in the occupied West Bank -- money that is badly needed to pay public sector salaries. "The Palestinians can forget about getting even one cent in the coming four months, and in four months' time we will decide how to proceed," Foreign Minister Avigdor Lieberman said in a speech on Tuesday night. Israel says Abbas violated previous peace accords by sidestepping stalled negotiations and securing a Palestinian status upgrade in the United Nations last month. Israel has already withheld the December transfer, saying the money would be used to start paying off $200 million the Palestinians owe the Israel Electric Corporation. Lieberman, a hardliner in Prime Minister Benjamin Netanyahu's conservative coalition government, said the Palestinians also had another debt with the Israeli water authority that would have to be paid off. "Israel is not prepared to accept unilateral steps by the Palestinian side, and anyone who thinks they will achieve concessions and gains this way is wrong," he said. Yasser Abed Rabbo, a senior Palestinian official, said earlier this month that Israel was guilty of "piracy and theft" by refusing to hand over the funds. The European Union has also criticized Israel for not handing over the cash. "Contractual obligations ... regarding full, timely, predictable and transparent transfer of tax and custom revenues have to be respected," it said on Monday. Israel has previously frozen payments to the PA during times of heightened security and diplomatic tensions, provoking strong international criticism, such as when the U.N. cultural body UNESCO granted the Palestinians full membership a year ago. Abbas's U.N. victory was a diplomatic setback for the United States and Israel, which were joined by only seven other countries in voting against upgrading the Palestinians' observer status to "non-member state", like the Vatican, from "entity". Hours after the U.N. vote, Israel said it would authorize 3,000 new settler homes in the West Bank and East Jerusalem and expedite planning work for thousands more in a geographically sensitive area close to Jerusalem. Critics say this plan would kill off Palestinian hopes of a viable state. (Writing by Dan Williams; editing by Crispian Balmer) World United Nations Israel Middle East Turmoil Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. 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