Israel's third largest bank says it is cutting ties with financial institutions operating in the Palestinian territories - a new blow to the embattled Palestinian government.
Officials at the Israel Discount Bank said Tuesday the decision results from ongoing concern that doing business with the Hamas-led Palestinian Authority would violate Israel's anti-terrorism laws.
Hamas, which came to power in January, has called for the destruction of the Jewish state.
A second bank authorized to deal with the Palestinian Authority under 1993 peace accords - Bank Hapoalim - announced in February it was cutting ties with the Palestinians by early July. Officials say the Discount Bank cut-off will occur by November.
The Palestinian Authority does its local business in the Israeli currency, the shekel.
Meanwhile Palestinian President Mahmoud Abbas is urging the European Union to restore funding to his government.
In an address to the European Parliament in Strasbourg Tuesday, Mr. Abbas said the recent European aid cut-off threatens to make the deteriorating economic and social situation in the territories even worse.
The EU and the United States have frozen aid to the Hamas-led Palestinian Authority because of Hamas' refusal to recognize Israel and renounce violence. For its part, Israel is withholding about $50 million each month in tax revenue that it collects for the Palestinians.
Some information for this report was provided by AFP and AP.