Following the decision, Israeli security forces conducted raids on multiple homes, confiscating cash and assets worth hundreds of thousands of shekels, the Defense Ministry said. The funds, Katz said, were payments made by the PA to convicted terrorists and their families as compensation for past attacks.

In addition to the sanctions, Israel froze NIS 470 million ($131 million) in PA funds, which Katz stated would be redirected to support victims of terror. He condemned the payments as “blood money” that “fuels terrorism” and reiterated Israel’s commitment to combating terror through military, economic, and diplomatic measures.

“We will not allow the Palestinian Authority to continue rewarding terrorists for murdering and harming Israeli citizens,” Katz declared.

Israeli authorities confirmed that the seized funds would be allocated to terror victims and their families.

The move comes after the US froze financial aid to the PA.

The Palestinian Authority (PA) allocates around $279 million annually to pay salaries to security prisoners in Israeli prisons, which range from $400-$3,400 per month, depending on the sentence. For comparison, PA welfare benefits to ordinary Palestinians range from $60-$170 per month depending on need. Those who participated in terror attacks killing Israelis — thus receiving the most severe sentences — got the highest payouts.

Israeli officials say the payouts provide incentives for terror and regularly offset an equivalent amount from taxes that Israel collects on behalf of the PA. The new law allows families to collect judgments against the PA from the frozen funds.

Ramallah has been paying out stipends for years, but the issue came under a spotlight following the 2018 murder of Taylor Force, a U.S. citizen killed by a Palestinian who went on a stabbing rampage in Jaffa.