The US recently sanctioned seven Israeli settlers and two farming outposts in the West Bank in response to a surge in violence, freezing their assets and preventing them from carrying out financial transactions with US banks and individuals.

Earlier this week, Israel's widely-read free Hebrew language daily Israel Hayom reported that the Biden administration had "dramatically" softened its sanctions against these individuals after pressure from Israel's finance minister, Bezalel Smotrich.

Simcha Rothman, an Israeli politician from Smotrich's ultranationalist Religious Zionism party, later shared a screenshot of the article on social media, congratulating Smotrich for pushing the US to understand that its sanctions had "crossed the line."

On Friday, the US Treasury Department published the letter it had sent to the Israeli authorities on Tuesday in response to questions from Israeli banks about "subsistence payments for persons sanctioned under this authority."

The letter said Israeli banks could still process transactions for sanctioned individuals "that are ordinarily incident and necessary to basic human needs or subsistence," as long as they did not involve "the U.S. financial system or U.S. persons."

This step, which was "consistent with Treasury's approach across multiple sanctions programs," included staples like food, healthcare, basic housing, and taxes.

"Israeli banks would also not be exposed to sanctions risk for processing transactions for expenses essential for the survival of animals on farms that are blocked as a result of a designation of their owners," it added.

A Treasury spokesperson told AFP that the Biden administration still "fully intends to enforce" the sanctions, adding that "humanitarian exceptions" exist for all US sanctions programs.

At least 444 Palestinians have been killed by Israeli forces or terrorist settlers across the West Bank since the Israeli war on Gaza began.