Israel has decided to freeze a monthly revenue transfer to the Palestinians in response to President Mahmoud Abbas's approach to the International Criminal Court and other international agencies, an Israeli official said on Saturday.

The official said Prime Minister Benjamin Netanayhu had decided, in consultation with cabinet ministers, to freeze a planned monthly transfer of 500 million Israeli shekels (about $125 million), which Palestinians rely on to run their government and pay civil servants' salaries.

Israel had condemned Abbas's move last Wednesday as a unilateral step that undermined prospects for a negotiated peace settlement.

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