Israel's security cabinet decided on Monday to maintain a freeze on the transfer of tax revenues to the Palestinian Authority, imposed after Palestine won UNESCO membership, an official said.
"There's no change in the decision of November 1, which is for a temporary hold on the transfer of funds to the PA," he told AFP on condition of anonymity, after Israeli officials met envoys of the international Quartet of Middle East peacemakers.
He did not say when the tax issue would next be reviewed.
"We are disappointed that the Palestinians are not heeding the call of the Quartet for a return to direct peace talks," he added.
"Israel remains ready for the immediate resumption of talks without preconditions but unfortunately... they continue to raise artificial concerns that prevent the resumption of direct talks."
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Under the terms of an economic agreement between the sides signed in Paris in 1994, Israel transfers to the Palestinian Authority tens of millions of dollars each month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports.
The remittances constitute a large percentage of the Palestinian budget.
Israel often freezes the transfer of funds as a punitive measure in response to diplomatic or political developments viewed as harmful.
The last time the monies were frozen was in May shortly after the Fatah movement signed an unexpected unity deal with Hamas, the Islamist movement which rules the Gaza Strip, in a move which drew an angry reaction from Israel.
The decision to freeze the tax funds was taken a day after the UN cultural organisation voted to accept Palestine as a full member, despite strong opposition from the United States and Israel.
Both Washington and Israel had lobbied UNESCO to delay the vote, with the Jewish state warning that the membership bid was unilateral and would jeopardise the chances of reviving negotiations.