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The United States warned on Thursday that Israel will see a "massive" negative impact if the Palestinian Authority collapses as Washington again pressed its ally to let revenue flow.

"We have made clear to the government of Israel in some very direct conversations that there is nothing that could be more counter to the strategic interests of Israel than the collapse of the Palestinian Authority," State Department spokesman Matthew Miller told reporters.

While acknowledging shortcomings in the Palestinian Authority, he said the Ramallah-based body had helped maintain stability in the occupied West Bank even as war has raged in Gaza, run for years by political rivals Hamas.

"If you saw the Palestinian Authority collapse and instability spread across the West Bank, it's not just a problem for the Palestinians," he said, "it is also a massive security threat for the state of Israel."

Under peace agreements in the 1990s, Israel collects money for the Palestinian Authority, which exercises limited autonomy in parts of the West Bank. Israel then disburses the money to the PA.

Israel has occupied the West Bank since 1967, after it illegally invaded the territory.

Israel has been blocking revenue since it began waging its deadly war in the Gaza, in response to attacks carried out by Hamas on October 7.

Israel has killed at least 36,654 Palestinians since it began waging its brutal military onslaught in the enclave, while soldiers and settlers have also killed at least 530 Palestinians in the West Bank over the past eight months.

Israeli's extreme far-right finance minister Bezalel SmotrichÌýadvocates for the expansion of Jewish settlements of the West Bank. Settlements are a violation of international law.

The World Bank recently warned that the Palestinian Authority's fiscal situation has "dramatically worsened" with the risk of complete collapse.Ìý