TEL AVIV, August 11, 2011 (WAFA) – Israeli Finance Minister, Yuval Steinitz, Wednesday called for Israel to withhold tax revenues that it collects on the Palestinian Authority's behalf, to pressure President Mahmoud Abbas to back down from seeking United Nations full membership in September, said Haaretz newspaper.

Steinitz said that due to the PA's financial crisis and inability to pay its public employees, withholding Palestinian tax money may lead to a Palestinian deferment.

According to Haaretz, Israeli Defense Minister Ehud Barak objected to Steinitz's suggestion and warned from destructive results that could lead to the PA's collapse and anarchy in the Palestinian Territory.

Israeli Prime Minister Benjamin Netanyahu met with his senior ministers on Wednesday to discuss Israeli measures to deal with the Palestinian efforts to gain UN recognition of a Palestinian state within 1967 borders in September, reported the newspaper.

In a related matter, a senior western diplomat warned that the US will suspend its aid to the PA if it continues with its plans to head to the UN in September.

Despite the pressure on the PA, PLO Executive Committee Member, Saeb Erekat, recently denied news on Palestinian deferment and asserted that the PA is proceeding with its plans.

R.Q./F.J.