Steinitz told Army Radio that he had postponed a regularly scheduled meeting with the PA to discuss the transfer of cash collected at border crossings and ports on behalf of Palestinians.
Sunday's postponed meeting was supposed to have culminated in the transfer of around 300 million shekels ($88.7 million) to the PA, according to Israeli daily Yedioth Aharonoth.
Under an economic deal agreed alongside the Oslo Accords, Israel collects between 3.5 and 5.0 billion shekels ($1.04 billion to $1.48 billion) each year on behalf of the PA. The revenue forms a significant part of the PA's annual budget.
[Just to clarify: this is Palestinian money; in this odd arrangement, Israel gets to collect it and then decide whether or not to transfer it.]
Steinitz said the decision was made in response to the announcement Wednesday that Fatah and Hamas had reached an agreement to end years of rivalry, which in 2007 led to the division of the Gaza Strip and the West Bank under separate governments.
President and Fatah leader Mahmoud Abbas and Hamas chief Khalid Mash'al will meet in Cairo on Thursday to sign a deal to reunite the Palestinian territories, officials said Friday.
PA Minister of Economy Hassan Abu Libdeh slammed Steinitz's decision, and warned that Israel would be in violation of international agreements if it failed to transfer the funds.
"These funds are the right of the Palestinian people," he told AFP.
"Any delay in the transfer of these funds is a violation of and infringement on Palestinian rights and a serious violation of the current arrangements, and Israel bears full responsibility for the consequences of this threat."
Khalil Al-Hayya, a member of Hamas' political bureau in Gaza, called Israel's decision "Zionist piracy."
"The occupation is taking these measures in an attempt to pressure us so we will not achieve reconciliation," he said.
Palestinian National Initiative secretary-general Mustafa Barghouthi described Israel's decision to freeze Palestinian money as "an act of piracy."
"This is not Israeli money - it's Palestinian money," Barghouthi said, adding that Israel was trying to dictate Palestinians' internal affairs.
"This is an aggressive act that shows Israel is against not only Palestinian unity but Palestinian democracy," he said.
The reconciliation deal followed youth protests across the West Bank and in the Gaza Strip demanding national unity, as revolutions overthrowing unrepresentative regimes across the region took root in Palestine in a call to end the national division. Since March 15, protesters demanding Palestinian unity came onto the streets, camped out in public squares, and held hunger strikes.
March 15 movement organizer Ma'ath Musleh noted that Israel had been withholding money from the Palestinian Authority even before the reconciliation deal was announced, but said the freezing of tax revenue indicated that parties must move quickly to finalize their reconciliation.
National unity would enable Palestinians to stand firm against Israeli threats, Musleh said, adding that the PA should not succumb to Israel's blackmail.
"The PA must choose between the people or Israel. This blackmail just proves who is the number one beneficiary from our division," he said.
Steinitz said the decision was made in response to the announcement Wednesday that Fatah and Hamas had reached an agreement to end years of rivalry, which in 2007 led to the division of the Gaza Strip and the West Bank under separate governments.
President and Fatah leader Mahmoud Abbas and Hamas chief Khalid Mash'al will meet in Cairo on Thursday to sign a deal to reunite the Palestinian territories, officials said Friday.
PA Minister of Economy Hassan Abu Libdeh slammed Steinitz's decision, and warned that Israel would be in violation of international agreements if it failed to transfer the funds.
"These funds are the right of the Palestinian people," he told AFP.
"Any delay in the transfer of these funds is a violation of and infringement on Palestinian rights and a serious violation of the current arrangements, and Israel bears full responsibility for the consequences of this threat."
Khalil Al-Hayya, a member of Hamas' political bureau in Gaza, called Israel's decision "Zionist piracy."
"The occupation is taking these measures in an attempt to pressure us so we will not achieve reconciliation," he said.
Palestinian National Initiative secretary-general Mustafa Barghouthi described Israel's decision to freeze Palestinian money as "an act of piracy."
"This is not Israeli money - it's Palestinian money," Barghouthi said, adding that Israel was trying to dictate Palestinians' internal affairs.
"This is an aggressive act that shows Israel is against not only Palestinian unity but Palestinian democracy," he said.
The reconciliation deal followed youth protests across the West Bank and in the Gaza Strip demanding national unity, as revolutions overthrowing unrepresentative regimes across the region took root in Palestine in a call to end the national division. Since March 15, protesters demanding Palestinian unity came onto the streets, camped out in public squares, and held hunger strikes.
March 15 movement organizer Ma'ath Musleh noted that Israel had been withholding money from the Palestinian Authority even before the reconciliation deal was announced, but said the freezing of tax revenue indicated that parties must move quickly to finalize their reconciliation.
National unity would enable Palestinians to stand firm against Israeli threats, Musleh said, adding that the PA should not succumb to Israel's blackmail.
"The PA must choose between the people or Israel. This blackmail just proves who is the number one beneficiary from our division," he said.
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