Transfer of $127m in revenue withheld in retaliation for move to join International Criminal Court, officials say.
A US jury has found the Palestinian Authority (PA) and the Palestine Liberation Organisation (PLO) liable for supporting attacks in Israel more than a decade ago that killed American citizens.
Jurors in Manhattan federal court on Monday awarded $218.5m in damages to 10 American families who brought the case, a sum that is automatically tripled to $655.5m under a 1992 US anti-terrorism law.
The PA rejected the verdict as “baseless”.
“The decision is a tragic disservice to the millions of Palestinians who have invested in the democratic process and the rule of law,” Palestinian Deputy Minister of Information Mahmoud Khalifa said in a statement submitted to Al Jazeera.
“We will appeal this decision,” Khalif said, accusing hardliners in Israel of abusing the US legal system to block a two-state solution that would create an independent Palestine.
In the statement is sent to Al Jazeera, Khalifa said there is an effort “to attack and divert” the “limited resources” of the Palestinian Authority from needed services for the territories.
The six attacks in Jerusalem between 2002 and 2004 killed 33 people and wounded more than 390 others during the second Palestinian uprising against Israel.
Israeli authorities have blamed the Palestinian Hamas movement and the al-Aqsa Martyrs Brigades for carrying out the attacks. Both groups are blacklisted as terrorist organisations in the US.
The PA and PLO, however, denied involvement in the attacks, and it remains unclear if and how they can pay.
In his argument before the court last week, defence lawyer Mark Rochon said “there is no conclusive evidence that the senior leadership of the PA or PLO were involved in planning or approving specific acts of violence.”
Lawyers for the PA also contended that the leadership should not be held responsible for “crazy and terrible” attacks carried out by people who acted independently.