Palestinian President rejects Israeli tax transfer after utility debts deducted

Palestinian President Mahmoud Abbas has rejected an Israeli transfer of millions of dollars in tax revenue.

Abbas said he ordered the money returned Sunday because "they deducted one third" to pay for the utility bills it owes Israel. Palestinians are believed to owe millions of dollars for use of utilities and hospitals. Under existing agreements, Israel collects taxes and customs on behalf of the Palestinians and then transfers the sums. That revenue accounts for about 70 percent of the Palestinians' budget.

Israel has withheld tax revenue since January after the Palestinians applied to join the International Criminal Court — where they could pursue war crimes charges against Israel. It has temporarily withheld funds in the past as retaliation for unilateral Palestinian actions.

Israeli officials were not immediately available for comment.