Hawzah News Agency (Occupied Territories of Palestine) - The bill, which was passed by 87 to 15 on Monday, will authorize the Tel Aviv regime to deduct those payments from the taxes Israel collects on behalf of the Palestinian Authority (PA) under bilateral agreements.
Avi Dichter, chairman of Israel's foreign affairs and military committee and the former head of the Shin Bet intelligence agency, said the PA spends seven percent of its budget, estimated at 1.1 billion shekels ($300 million) to aid Palestinian prisoners and pay stipends to the families of those killed or wounded by the Israeli military.
The stipends benefit roughly 35,000 families of Palestinians killed and wounded in conflict with Israel.
Israeli lawmaker Yesh Atid MK Elazar Stern, who also cosponsored the law, said similar legislation in the US had prompted the Israeli bill.
Last week, the US suspended aid funds to the West Bank and the besieged Gaza Strip under the so-called "Taylor Force Law," which was passed in March of this year, preventing the PA from paying monthly stipends to the families of killed, wounded and imprisoned Palestinians.
Israeli Arab lawmakers, however, slammed the measure, with Jamal Zahalka, of the Joint List of Arab parties, describing the bill as "despicable."
"You are stealing from the Palestinian people," Zahalka said ahead of the Knesset vote.
Senior PA official Hanan Ashrawi said the Israeli measure amounts to theft and piracy.
"This is nothing short of highway robbery, this is real piracy, they are stealing Palestinian funds, it's not theirs to decide what to do with it, if we were free we wouldn't need Israel to collect customs," she added.
Palestinian President Mahmoud Abbas has defended such payments as an important function of his administration.
In a speech in June 2017, Abbas argued that "payments to support the families are a social responsibility to look after innocent people affected by the incarceration or killing of their loved ones."
"It's quite frankly racist rhetoric to call all our political prisoners terrorists," Abbas said. "They are, in actuality, the victims of the occupation, not the creators of the occupation."