Israel denies Palestinians US$138 million over payments made to prisoners
- Israel claims payments encourage further violence, while Palestinian Authority says they are form of welfare
- Move to withhold the money comes in response to an Israeli law passed last year allowing it to do so

Israel said its security cabinet on Sunday decided to withhold US$138 million in tax transfers to the Palestinian Authority over its payments to prisoners jailed for attacks on Israelis.
A statement from Prime Minister Benjamin Netanyahu’s office said the withheld cash would be equal to that paid by the PA last year to “terrorists imprisoned in Israel, to their families and to released prisoners”.
Israel alleges the payments encourage further violence.
The PA says the payments are a form of welfare to the families who have lost their main breadwinner and denies it is seeking to encourage violence.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes in their conflict with Israel. Palestinian leaders often venerate them as martyrs.