Israel has announced that it will release tax funds to the Palestinian Authority that it has withheld as punishment for its move to join the International Criminal Court.
A statement issued by the Prime Minister Benjamin Netanyahu office on Friday said tax revenues accumulated in February would be transferred after "payments for services rendered to the Palestinian population have been deducted, including electricity, water and hospitalisation".
The statement said the decision was made based on humanitarian concerns and in Israel's interests.
"Given the deteriorating situation in the Middle East, one must act responsibly and with due consideration alongside a determined struggle against extremist elements," Netanyahu said.
Palestinian officials told Al Jazeera that Israel had not yet informed them of the planned move.
Tony Blair, representative of the Quartet consisting of the Unite States, European Union, United Nations, and Russia, welcomed the move by the Israelis, calling it the "right decision".
"It is essential that all parties show restraint and responsibility in the coming weeks so that we can move the engagement between the Israelis and Palestinians forward," he added.
Tax revenues due to the Palestinian Authority were withheld in January after its leadership proceeded with moves to join the International Criminal Court despite Israeli protests.
Israeli officials prevented the transfer of $127m in VAT and customs duties collected in December to the Palestinian leadership.
The move by Israel was condemned by the US, which said Israeli actions would raise tensions.
"We call on both sides to avoid actions that raise tensions and make it more difficult to return to direct negotiations," said US State Department spokeswoman Jen Psaki.
Source: Al Jazeera