Nudged by rightwing political rivals after a deadly Palestinian attack on a young Israeli woman, Prime Minister Benjamin Netanyahu who seeks re-election pledged on Sunday to freeze money transfers to the Palestinian Authority.
Israel collects around USD 127 million a month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports and then transfers it to the PA.
The Israeli parliament last year passed legislation to partially withhold funds, in response to PA payments to families of Palestinians jailed by Israel for attacks against Israelis.
"By the end of the week, the staff-work necessary for implementing the law on deducting terrorists' salaries will be completed," Netanyahu -- who faces a general election in April -- told journalists at the start of the weekly cabinet meeting.
"Next Sunday I will convene the security cabinet and we will approve the necessary decision to deduct the funds. Let nobody doubt, the funds will be deducted, at the start of next week," he said in Hebrew.
Earlier on Sunday, Education Minister Naftali Bennett was among rightwingers pressing Netanyahu to implement the law after a Palestinian was arrested at the weekend on suspicion of killing 19-year-old Ori Ansbacher.