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Israel hit Palestine with vicious sanctions late on Thursday in retaliation for the nation’s leadership signing international conventions.
An Israeli official said it would take debt payments out of Palestinian tax money collected by Israel and limit access to Palestinian deposits in Israeli banks.
The anonymous official didn’t put a figure on the sanction, but Israel collects about £59.5 million in tax on goods headed to Palestine — accounting for about two-thirds of the Palestinian budget.
Israel is also pulling out of a gas project off the coast of Gaza.
But senior Palestinian official Yasser Abed Rabbo said Palestine would not cave in to illegal bullying.
“These sanctions will not scare us. They’re evidence to the world that Israel is a racist occupation state that has resorted to the weapon of collective punishment, including settlements and their expansion and the denial of our most basic rights as a people,” he said.
UN secretary-general Ban Ki Moon accepted Palestinian applications on Thursday to join UN conventions.
And Switzerland said Palestine could sign up to the Geneva Conventions — the international rules of war which cover occupations.
Israel argues the conventions, which forbid colonisation of occupied land, shouldn’t apply to Palestine because it is not universally accepted as a state in its own right.
The UN general assembly voted 138-9 in 2012 to give Palestine non-member observer state status.
Only Israel, the US, Canada, the Czech Republic, the Marshall Islands, Micronesia, Nauru, Panama and Palau voted against.
Meanwhile Israel’s far-right Economy Minister Naftali Bennett threatened to pull his Jewish Home party out of the coalition if it made a deal to release Palestinian prisoners.
And he called for many illegal settlements in the occupied West Bank to be annexed, saying peace talks were dead.
Israeli chief negotiator Tzipi Livni said Mr Bennett was acting like a “provocative child.”
She said: “If you want to go totally crazy, keep it up until we can no longer make a deal and lose everything we hold dear.”
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