Israeli officials remained close- mouthed Monday after Finance Minister Yuval Steinitz announced a day earlier a decision to freeze the transfer of tax revenues to the Palestinian National Authority (PNA) following the reconciliation accord between Fatah and Hamas.

Steinitz, along with Israeli Prime Minister Benjamin Netanyahu and many other senior Israeli officials, have slammed the interim unity government deal reached between Hamas and the Fatah-ruled PNA last week in Cairo, and vowed not to negotiate with Hamas, which Israel maintains is a terrorist organization.

The Israeli leadership is concerned that the accord, which the two sides hope will lead to new elections in the PNA within a year, would slam the door on any future peace negotiations with the Palestinians, since Israel will have nothing to do with Hamas, whose founding charter calls for Israel's destruction. Additionally, Israel is demanding proof that the tax and customs duties it collects on behalf of the Palestinians will not reach Hamas militants.

"The burden of proof rests with the PNA, which has to guarantee that not a single shekel which we collect will reach Hamas or terror organizations," the finance minister said, according to the Ha'aretz daily.

Steinitz also forbade representatives of his office from taking part in a scheduled meeting with the Palestinians over the issue, which was then postponed for a week.

"I decided to put off the meeting about the transfer of money to the PNA until it is clarified whether the money will be relayed to Hamas," Steinitz told Army Radio in an interview on Sunday.

A spokesman at the prime minister's office refused to respond to a report by local media alleging that American officials had requested "clarification" on the details of the possible move, which would withhold a regular tax payment of some 300 million shekels (88 million U.S. dollars) to the PNA.

The Americans, at the behest of the PNA, met with officials of Israeli treasury and prime minister's office, according to Ha' aretz.

"No state is obliged to provide funds to those who infringe on its safety and security," a Foreign Ministry official told Xinhua in reference to Steinitz's remarks.

"It is our obligation with regard to the safety of our citizens to withhold the taxes and customs duties pending the details of the agreement between Fatah and Hamas, before coming to any decision," he said.

Former chief Palestinian negotiator Saeb Erekat slammed the Israeli step, calling it "financial piracy."

The accord with Hamas was an internal Palestinian matter, Erekat said, adding that "The Israeli decision is financial piracy that reflects Israel's dangerous intentions."

"Israel gathered the taxes to forward on to the Palestinians according to the Oslo Accords, both in essence and in fact," an Israeli diplomat said, "since the Palestinians themselves have broken the tenets of the agreement so many times, they are the last to make claims against Israel."