Tel Aviv, Jul 12 (IANS): Israel's security cabinet has decided to cut millions of dollars from tax revenues it collects on behalf of the Palestinian Authority (PA), according to a statement issued by the Prime Minister's Office.

The security cabinet on Sunday decided to deduct 597 million shekels ($183 million) from funds that were supposed to be transferred to the PA, reports Xinhua news agency.

The cabinet said the funds are equal to stipends paid by the PA to the families of Palestinians jailed in Israel or killed while carrying out attacks against Israel.

According to a report prepared by the Defence Ministry and submitted to the cabinet, the PA transferred 597 million shekels to families of Palestinian prisoners in Israeli jails.

"These funds will be frozen on a monthly basis out of the payments that Israel transfers to the Palestinian Authority," the cabinet said.

Israel says the stipends "encourage" Palestinians' attacks against Israelis but the Palestinians say these are welfare payments for needy families.

In July 2018, the Israeli Parliament passed a law to deduct from tax revenues an amount equal to what the PA pays to families of prisoners.