Qatar will be withholding funds scheduled for Gaza next month due to Israel's decision to annex large parts of the occupied West Bank, Israel's Channel 13 TV reported.
The report cited several sources among Western diplomats as saying that Israel has been informed of the financial aid cut over the past few weeks, including at a virtual meeting of countries providing funds to the Palestinian Authority in the West Bank, during which Israeli officials were present.
This comes after Qatar provided $1.5 million in aid to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in support of the body's food assistance programme in Gaza.
By cutting the aid, Doha is attempting to pressure Tel Aviv to reconsider the annexation plan, which the country does not want to be seen promoting with further donations.
The Israeli government is planning to annex the occupied Jordan Valley and settlements in the West Bank on 1 July.
Palestinian estimates indicate that the Israeli annexation plan will cover more than 30 per cent of the West Bank.
To ease economic hardships and help calm tensions along the Israel-Gaza fence, Qatar provided more than $150 million in 2019 to buy fuel for Gaza's lone power plant and provide monthly cash handouts to nearly 70,000 of the enclave's residents.