Israel to withhold tax transfers to Palestinians

(AP) Israel says it will withhold more than $100 million in taxes and other funds the Jewish state collects on behalf of Palestinians to punish them for their successful bid to win U.N. statehood.

Israel's Cabinet on Sunday also passed a resolution saying it would not negotiate on the basis of the U.N. General Assembly's recognition of a state of Palestine in the West Bank, east Jerusalem and Gaza Strip.

Finance Minister Yuval Steinitz said the government would use the money it was to transfer to the Palestinians to pay down their debt to the Israel Electric Corp. and other Israeli bodies.

This was the second act of reprisal by Israel. On Friday, Israel announced it would press ahead plans to build thousands of settler homes.