Ministers on Sunday approved a bill that would slash funds to the Palestinian Authority over salaries paid out by Ramallah to convicted terrorists and their families.

The Ministerial Committee for Legislation voted in favor of the legislation proposed by Yesh Atid MK Elazar Stern, giving the bill coalition backing.

The bill was expected be brought to a preliminary vote in the plenum on Wednesday.

The bill would see Israel cut around NIS 1 billion ($285 million) from the annual tax revenues it collects for the Palestinians and hands over to them — equivalent to the amount that Ramallah pays to terrorists and their families, a practice Israel and the international community have attempted to end.

Authored by Stern, the bill has been co-signed by Knesset members from both the coalition and opposition, including coalition chair David Bitan and Foreign Affairs and Defense Committee chair Avi Dichter, both of Likud.

Stern warned that the current “absurdity” prevents the sides from drawing closer in the pursuit of peace, the report said.

Mahmoud Abbas celebrates the release of Palestinian prisoners as part of Israeli-Palestinian peace negotiations in August 2013. (Issam Rimawi/Flash90)

Mahmoud Abbas celebrates the release of Palestinian prisoners as part of Israeli-Palestinian peace negotiations in August 2013. (Issam Rimawi/Flash90)

“The Palestinian Authority not only rewards murder but encourages it, and encourages murder over [just] causing injury, and encourages many victims rather than just a few… That is something that must stop, not only because it isn’t moral but because it is a barrier to peace… for how can you make peace with those who encourage murder?”

Israel transfers about NIS 460 million ($125 million) a month, or NIS 5.4 billion ($1.5 billion) a year, to the Palestinian Authority in tax and customs duties levied on goods destined for Palestinian markets that transit through Israeli ports. The transfers are a key revenue source for the cash-strapped Palestinian government. Israel has withheld payment in the past over political disputes.

The proposed legislation says that in 2016, the Palestinian Authority paid out some NIS 1.1 billion ($303 million) in stipends and other benefits to the families of so-called “martyrs” who lost their lives during attacks against Israelis and to Palestinian prisoners serving time in Israeli jails for security offenses.

According to PA law, Palestinian security prisoners serving time in Israeli jails and families of assailants killed while carrying attacks against Israelis are eligible to receive stipends and other benefits.

The Middle East Media Research Institute estimates that the allowances range from $364 (NIS 1,500) a month for a term of up to three years, to $3,120 (NIS 13,000) for a term of 30 years and more. There is also a monthly $78 supplement for terrorists from Jerusalem and a $130 supplement for Arab Israeli terrorists.

Stern’s bill represents the first time the issue has been tackled through Israeli legislation, and follows similar efforts to limit US funding to the PA.

The Yesh Atid party hailed the passage of the bill in the committee on Sunday, saying in a statement that “the State of Israel must lead and initiate in the fight against terrorism.”

Earlier on Sunday, families of those killed or injured in terror attacks made an impassioned plea for ministers to approve the measure, saying that the salaries were a factor behind terrorist recidivism.

“Will we continue to help the Palestinian Authority to fund terror and harm us again? How can the government, which warns about incitement to terror in Palestinian schools, in educational material, in mosques and on social media, continue to routinely approve transferring funds to terrorists,” read the letter, signed by 180 people impacted by terror and sent to Prime Minister Benjamin Netanyahu and Justice Minister Ayelet Shaked, according to a report in the Ynet news site.

Israel has long argued that the PA’s payments glorify terrorism, part of what it sees as a broader trend of “incitement” blamed for fueling a surge of violence last year.

Yesh Atid MK Elazar Stern, speaks during a conference for Young Leadership programs, at Haifa University, on April 11, 2016. (Hadas Parush/Flash90)

Yesh Atid MK Elazar Stern speaks during a conference for Young Leadership programs, at Haifa University, on April 11, 2016. (Hadas Parush/Flash90)

The issue of PA payments to terrorists received heightened media coverage during US President Donald Trump’s visit to Israel last month, during which he met with Palestinian Authority President Mahmoud Abbas.

In an apparent public upbraiding of Abbas over the payments, Trump told him at their joint press conference in Bethlehem that “peace can never take root in an environment where violence is tolerated, funded or rewarded.”

Behind closed doors, Trump fumed at Abbas for lying to him, Israel’s Channel 2 reported shortly after the trip. “You tricked me in DC! You talked there about your commitment to peace, but the Israelis showed me your involvement in incitement [against Israel],” Trump was said to have shouted at a shocked Abbas.

On May 3 in Washington, at the first meeting between the two, Trump urged Abbas to stop incitement, crack down on terrorism, and “resolve” his government’s policy of paying stipends to terrorists and their families.

Abbas, for his part, told Trump in their joint White House press conference that “we are raising our youth, our children, our grandchildren on a culture of peace.”

In the wake of that claim, Prime Minister Benjamin Netanyahu slammed Abbas, saying that the statement was “far from the truth.”

Vanderbilt University held a campus memorial service for Taylor Force, above, on March 18, 2016. (Facebook)

Vanderbilt University held a campus memorial service for Taylor Force, above, on March 18, 2016. (Facebook)

Republican South Carolina Sen. Lindsey Graham reintroduced legislation in March that would cut US funding if it continues to provide monetary support to the families of those who commit acts of terror against Israelis and others.

The bill, known as the Taylor Force Act, is named after former US army officer Taylor Force, who was stabbed to death in March 2016 by a Palestinian terrorist while visiting Tel Aviv.

Marissa Newman and Times of Israel staff contributed to this report.