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Far-right Israeli Finance Minister Bezalel Smotrich on Thursday called Gazans "Nazis" and "terrorists" as he reiterated his refusal to transfer Palestinian tax funds to Gaza via the Palestinian Authority (PA), as reported in Israeli media. Ìý

Smotrich’s comments came after a report that the , which have been withheld for over two months.

There have been warnings that the continued withholding of funds couldÌýlead to the collapse of the PA, which oversees the occupied West Bank.

Speaking to Israeli public broadcaster Kan, Smotrich said he "appreciates the support of the United States and President [Joe] Biden very much but as long as I am the finance minister, we will not transfer a single shekel to the Palestinian Authority that will go to the families of the terrorists and Nazis in Gaza."

Under interim peace agreements, the Israeli Ministry of Finance collects taxes on behalf of Palestinians and makes monthly transfers to the PA as part of what is known as clearance funds. The PA earmarks a portion of that to be sent to Gaza.

However, while this system has been a source of tension for years, Israel has flat out refused to hand over the funds since October 7, claiming that the money will go to Hamas. The PA has refused to cut a deal whereby it would receive its allocation minus that which belongs to Gaza.

This is leading to a host of economic problems in the West Bank, which the US believes could lead to its collapse. It is also exacerbating the devastating humanitarian crisis in Gaza.

Smotrich was recently rebuked by the US for his call for Gaza to be ethnically cleansed of Palestinians, with the firebrand Israeli official calling for renewed "Jewish settlement" in the Palestinian territory.Ìý

On Wednesday, Palestinian Prime Minister confirmed that the situation with the funds was still at a "standstill" and claimed that international mediation was "ongoing".

While Shtayyeh did not downplay the negative economic consequences the withholding of funds by Israel was having in the West Bank, he was keen to highlight what Tel Aviv’s "collective punishment" is doing to Gaza.

“Gaza is witnessing a state of hunger and starvation, with shocking scenes for us and the world. Infants without milk, some of whom have lost their mothers, and children searching for food in long queues without reaching their turn," Shtayyeh said in a statement to the Palestinian government in Ramallah.Ìý

"It's been 89 days of starvation for the purpose of killing. Even the calorie counts needed for daily sustenance have been targeted by Israeli criminality," he said.