Israel will impose sanctions and penalties on Palestinian banks which process payments from the Palestinian Authority (PA) to the families of Palestinians who have spent time in Israeli jails, lsraeli media reported.
Last February, Israeli Defence Minister at the time, Naftali Bennett, signed a military decree which states that any person or body handing financial aid with the purpose of facilitating, advancing, funding or rewarding "terror-related offenses", is committing a crime that carries a punishment of up to ten years in prison and a fine.
Israeli public broadcaster Kan said the military law has been frozen several times by the current Defence Minister, Benny Gantz, for fear of provoking protests in the occupied West Bank.
Last year, Israel deducted part of the tax revenues it collects on behalf of the PA under the pretext that the amounts are used to pay the families of Palestinian prisoners and martyrs,
The Israeli action has added to the financial crisis suffered by the PA, which in turn refused to receive any of the tax revenues.
Israel detains about 4,500 Palestinians, including 160 children and 41 women.