UN Secretary-General Ban Ki-moon said Friday he was worried by the Palestinian Liberation Organization’s central council decision Thursday to end security cooperation with Israel, in a potentially explosive move after Jerusalem cut off a key source of funds.

The UN chief called for “international engagement” on the stalled peace process between Israel and the PA.

“(Ban) urges both parties to exercise utmost restraint and reverse their unhelpful cycle of actions and counter-actions,” said UN spokesman Stephane Dujarric. “The Secretary-General repeats his call on Israel to resume the transfer of tax revenues legally due to the Palestinian Authority.”

“In the absence of effective international engagement, the situation may further unravel,” Dujarric said.

The PLO council decided Thursday “to stop security cooperation in all its forms with the occupying power,” which it urged to “take over full responsibility for the Palestinian people in the occupied State of Palestine, the West Bank, East Jerusalem and Gaza.”

A source close to Palestinian Authority President Mahmoud Abbas told Israel Radio that the council’s decision was a recommendation only. Another Palestinian official said that Abbas must issue a presidential order ending the security cooperation with Israel.

Israeli officials said Friday that ties with the Palestinian Authority remain unchanged and that civil and defense cooperation continue unimpeded.

Israel has been withholding tax revenue from the Palestinians since they decided to join the International Criminal Court last month. Under a 1994 economic agreement, Israel agreed to transfer tens of millions of dollars each month to the PA in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports.

Set up under the 1993 Oslo Accords, which founded the Palestinian Authority, the security coordination involves the sharing of intelligence and is considered crucial for Israel to keep tabs on Hamas and its West Bank members.

Palestinian leaders have threatened to cut security ties with Jerusalem in the past, but cooperation held as both sides had a shared interest in maintaining the arrangement.

Israel sees security cooperation with the Palestinian Authority in the West Bank as a vital part of its efforts to stymie attacks on Israeli civilians and soldiers and gain intelligence on the ground.

The cooperation is rooted firmly in the joint interest of thwarting the Hamas terror group.

In 2005, after Abbas took over as Palestinian Authority president and renounced violence, Israel and the PA began to cooperate in advancing their shared interest of marginalizing the Hamas terrorist group, especially when Hamas forcibly seized control of Gaza in 2007.

On the ground, this has translated into far fewer Israeli troops and reduced friction, with the Israel Defense Forces gradually removing roadblocks that once bisected the West Bank.

Abbas said in the past that security cooperation with Israel would persist regardless of differences with the Israeli government.

Last month US Secretary of State John Kerry warned that the possibility of the Palestinian government halting security cooperation with Israel or disbanding because of its economic predicament was real and could have negative consequences even outside Israel and the West Bank.

“If the Palestinian Authority ceases or were to cease, security cooperation — or even decide to disband as a result of their economic predicament, and that could happen in the near future if they don’t receive additional revenues — then we would be faced with yet another crisis that could also greatly impact the security of both Palestinians and Israelis,” Kerry said. “And that would have the potential of serious ripple effects elsewhere in the region.”