The security cabinet approved the transfer of the Palestinian Authority's tax funds on Thursday, but with an offset of all the funds intended for the Gaza Strip - and in addition to the offset of "pay-for-slay" funds, which the PA earmarks for terrorists and their families.
It is unclear how much money will ultimately be deducted.
Officials in the Prime Minister's Office said that the Coordinator of Government Activities in the Territories (COGAT)is responsible for checking the amount of money.
With this decision, Israel has cut off all contact with the Gaza Strip, after deciding that no Palestinian workers from Gaza will work in Israel, in addition to returning the workers who were in Israel to the Strip on the day the war broke out.
It was also decided to return 3,200 Palestinian laborers to the Strip who left with an Israeli security permit to work in Israel and who are currently are being in the custody of the IDF.
According to estimates from security authorities, an effort to return them to the Gaza Strip may take place soon, but it may encounter difficulties in the field. Since there is no coordination with parties in the Gaza Strip and the action is unilateral in a combat zone threatened with mortars, rockets, and anti-tank missiles, there is a risk for Palestinian workers who cross the border from Israel back into Palestinian territory.
Otzma Yehudit head and National Security Minister Itamar Ben-Gvir voted against the two decisions made in the cabinet - the decision to transfer the funds intended for the Palestinian Authority, and the decision to return the workers who were in Israel on the day the war broke out to Gaza.
Regarding the decision to transfer the funds, he told the cabinet that it was merely a "continuation of the concept" that there is a difference between Hamas and the Palestinian Authority, the latter of which he claims funds terrorists and whose leaders expressed support for the October 7 massacre.
Regarding the decision to return the workers to Gaza, the national security minister alleged that workers from Gaza directed Hamas terrorists during the massacre and provided intelligence for them - these claims were investigated by security forces but have not yet been verified - and said that these workers should not be released but instead imprisoned.
A source privy to the contents of the cabinet discussion said that Ben-Gvir went on to demand an investigation, and claimed a link would be discovered to the Hamas Nukhba force and to intelligence gathering before the war broke out.
Shin Bet rejects Ben-Gvir's claims about Gaza workers
The head of the Shin Bet (Israel Security Agency) Ronan Bar rejected Ben-Gvir's claims, saying that there is no need for a procedure since the Shin Bet periodically validates their entry permits.
"There are people in the Shin Bet whose sole job is to check this, and every time they detect the slightest connection to Hamas, they cancel their permits," he said.
Despite Ben-Gvir’s demand to hold a vote on increasing humanitarian aid to the Gaza Strip, the issue did not come up for discussion or a vote.
The chairman of the Religious Zionism Party, Finance Minister Bezalel Smotrich, abstained from voting on the transfer of tax money and voted in favor of the decision to return the workers to Gaza. Apart from the two, all ministers of the cabinet voted in favor of both decisions.