In this file photo, Palestinian President Mahmoud Abbas speaks. AP
"President Mahmud Abbas... issued a decree to cancel articles in the laws and regulations related to the system of paying financial allocations to the families of prisoners, martyrs and the wounded," the official WAFA news agency reported.
These families are to remain eligible for financial benefits under the Palestinian social welfare system, according to criteria that apply to everyone, the report said.
The details of the implementation of the decree, which is likely to affect thousands of people, remains unclear.
WAFA said the programmes supporting prisoners' families would be transferred to an independent foundation, the Palestinian National Economic Development Institute.
Palestinian armed group Islamic Jihad and Hamas have criticised Abbas's decision.
"This behaviour flies in the face of patriotism," Hamas said in a statement where it called for the decree to be rescinded.
The Palestinian Authority (PA) is dominated by rivals of Hamas, and is based in the occupied West Bank.
Israel has long denounced the payments to families of Palestinian attackers, and the Israeli government has cited the practice as a reason to freeze funds for the PA.
The PA's benefit system has also been criticised by other countries, such as the United States and the Netherlands.
In 2018, during his first term as US president, Donald Trump signed into law rules suspending financial assistance to the PA as long as it continued to pay benefits to Palestinians linked to "terrorist" entities, according to the criteria of the Israeli authorities.
The Palestinian Authority has previously said the funds were a way of supporting families who have lost income, and may suffer the seizure or demolition of their property by Israel.
To circumvent this international pressure, the PA has already amended the system several times, seeking covert ways of maintaining it.
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