BANI NAIM, West Bank — The family of a Palestinian high school dropout who killed 13-year-old Hallel Ariel in her sleep last month before being shot dead is now eligible for $350 a month from a Palestinian fund for “martyrs.”

Israel argues that such stipends for families of Palestinian terrorists promote violence by rewarding attacks, and has stepped up a campaign against the fund after a series of terror attacks in the West Bank.

Prime Minister Benjamin Netanyahu called the payments “an incentive for murder,” and a government spokesman said that starting next month, Israel would deduct those sums from monthly transfers of taxes and customs it collects on behalf of the Palestinians.

“Terror has become a comfortable business for families,” said Foreign Ministry spokesman Emmanuel Nahshon. “This encourages violence.”

Palestinians scoff at the idea that money, along with alleged anti-Israel incitement, is a key motive for a nearly year-long rash of stabbing, shooting and vehicular attacks on Israelis. They say attackers are driven by despair over the chokehold of half a century of Israeli occupation or a desire to avenge others killed by Israeli troops or armed civilians.

“I don’t think anyone is willing to sacrifice his life for money. And for us as a family, all the money in the world won’t replace my son,” said Nasser Tarayrah, a well-to-do merchant from the West Bank town of Bani Naim whose 17-year-old son Muhammad killed Ariel as she slept in her bedroom at home in the Kiryat Arba settlement on June 30.

Reproduction photo, courtesy of the family, of Hallel Yaffa Ariel, 13, who was stabbed and killed in a terror attack in the settlement of Kiryat Arba, in the West Bank on June 30, 2016 (Yonatan Sindel/Flash90)

Reproduction photo, courtesy of the family, of Hallel Yaffa Ariel, 13, who was stabbed and killed in a terror attack in the settlement of Kiryat Arba, in the West Bank on June 30, 2016 (Yonatan Sindel/Flash90)

The elder Tarayrah said that rather than profiting from the attack, as Israel claims, the family will pay dearly. It has received a notice ordering the demolition of its two-story villa. Such demolitions of family homes are a standard Israeli response to attacks.

The clashing views over the fund are further poisoning a toxic atmosphere, at a time when France and Egypt are both making long-shot attempts to restart Israeli-Palestinian negotiations after a decade of paralysis.

The fund makes monthly payments to about 35,000 families of Palestinians killed and wounded in the long-running conflict with Israel, with a budget of $170 million this year, according to Palestinian figures. These include families of Palestinian suicide bombers and other terrorists.

By comparison, Israel transfers about $125 million a month, or $1.5 billion a year, to the Palestinian Authority in tax and customs rebates, money that belongs to the Palestinians. The transfers are a key revenue source for the cash-strapped autonomy government, and Israel has withheld payment in the past over political disagreements.

A banner with pictures of the late Palestinian leader Yasser Arafat, President Mahmoud Abbas and killer Mohammed Tarayrah, July 9, 2016 (AP Photo/Nasser Nasser)

A banner with pictures of the late Palestinian leader Yasser Arafat, President Mahmoud Abbas and killer Mohammed Tarayrah, July 9, 2016 (AP Photo/Nasser Nasser)

The martyrs’ fund was set up in 1967 by the Palestine Liberation Organization, the group that formally represents all Palestinians. The PLO has been sidelined since the establishment of the Palestinian Authority autonomy government as a result of interim peace deals with Israel in the 1990s.

The “martyrs’ fund” and another fund supporting families of Palestinians imprisoned by Israel are nominally PLO institutions, but are funded by the Palestinian Authority.

The fund for families of several thousand Palestinians held for alleged anti-Israeli activities, from stone-throwing to shooting attacks, has a 2016 budget of $125 million, according to the website of the Palestinian Authority’s Finance Ministry.

Palestinian officials say welfare payments help victims of Israel’s occupation — providing stipends to families, scholarships to university students and assistance to widows.

“This is a kind of social protection for the family,” said Qadura Fares, who heads the Palestinian prisoners’ association. “The children of the prisoners and martyrs and wounded have the right to go to schools, hospitals and get food.”

Israel says the payments glorify terrorism, part of what it sees as a broader trend of “incitement” blamed for fueling renewed violence over the past year.

It argues that fiery speeches by Palestinian leaders, venomous posts on social media networks and the naming of public squares after Palestinians who killed Israelis have created a hate-filled climate. PA President Mahmoud Abbas has spoken out against violence, but Israel says his condemnations of recent attacks have been half-hearted.

Abbas did not condemn the killing of 13-year-old Ariel or a drive-by shooting the next day near Hebron in which Rabbi Miki Mark, a father of 10, was killed.

President of the Palestinian National Authority Mahmoud Abbas addresses the media at the European Union Commission headquarters in Brussels on June 22, 2016. (AFP PHOTO / THIERRY CHARLIER)

PA President Authority Mahmoud Abbas addresses the media at the European Union Commission headquarters in Brussels on June 22, 2016. (AFP Photo/Thierry Charlier)

The next battleground could involve international assistance, as Israel argues that the martyrs’ fund is inadvertently subsidized by Western and Arab aid to the Palestinian Authority. The self-rule government receives several hundred million dollars a year in foreign aid.

The US, a key donor, has passed legislation meant to keep its aid from reaching the fund.

Norway, too, has expressed concern over its aid money being used for such purposes.

As a safeguard, US money is earmarked for specific purposes, and the legislation “requires us to deduct from our own development assistance to the Palestinian Authority amounts equal to payments to individuals for acts of terrorism,” said the US Consulate in Jerusalem, in a statement.

The debate came into focus after the killing of the young Ariel.

Tarayrah, the murderer, had written on Facebook he hoped to become a “martyr,” a term widely used by Palestinians for anyone killed in violent conflict with Israel.

Posters in his hometown praised him as a “heroic martyr.” Tarayrah’s mother was also reported to say in the wake of the attack that her son was “a hero” who made her “proud.”

These comments reflect broad social approval for those seen as willing to sacrifice their lives in the struggle against Israel, regardless of the circumstances — in this case the brutal stabbing to death of a sleeping girl.

Revenge can also provide a motive — though it’s not clear if it played a role in Tarayrah’s case. Two others from Bani Naim, including a cousin of the teen, attempted in separate attacks to ram their cars into troops guarding Kiryat Arba, and were killed by the Israeli soldiers they were targeting.

YouTube screenshot shows young Palestinian walking through heaven after successfully carrying out an attack on Israeli soldiers and dying in the process, thus becoming a martyr (YouTube screen capture)

YouTube screenshot shows young Palestinian walking through heaven after successfully carrying out an attack on Israeli soldiers and dying in the process, thus becoming a martyr (YouTube screen capture)

In principle, Tarayrah’s parents are now eligible for support from the “martyrs’ fund.”

Each family of a Palestinian killed by Israel receives a base monthly payment of 1,400 shekels ($350), said the head of the fund, Intisar al-Wazir, the widow of notorious PLO terror chief Khalil al-Wazir (Abu Jihad), who was assassinated by Israeli commandos in 1988.

If the person killed was married, the amount increases by $100, and $50 is added for each child, she said. Children of those killed by Israel receive support until age 18, or until they begin working. Those attending university receive support until graduation.

For some, it’s a main source of income.

Malehah Awwad, 56, receives about $700 a month for the loss of her two children. Her son Mahmoud was shot dead in 2013 during clashes between Israeli troops and Palestinian stone throwers. Last November, her daughter Hadil, 14, apparently seeking revenge, was shot dead as she tried to stab Israelis with scissors in Jerusalem.

“I have lost my mind,” said Awwad. “No one can stand the loss of their daughter or son.”

Those qualifying for assistance from the fund include people killed during two Palestinian uprisings against Israel, three wars in the Gaza Strip and Israel’s First Lebanon War in the 1980s. Relatives of about 200 Palestinians killed in the current fighting are also eligible. Israel says some two-thirds of them were killed in the act of attacking Israelis, more than 30 of whom have been killed since last fall.