(REUTERS) — Israel said on Sunday it was withholding this month’s transfer of tax revenues to the Palestinian Authority, after the United Nations’ de facto recognition of a Palestinian state.

Under interim peace deals, which Israel says the Palestinians violated by unilaterally seeking an upgrade of their status at the United Nations, it collects about $100 million a month in duties on behalf of the authority.

But, Israeli officials said, the authority owes about $200 million to the Israel Electric Corporation, and that money will now be deducted from the tax transfers.

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