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US concerned about Israeli threat to disconnect Israeli and Palestinian banks

US Treasury Secretary Janet Yellen said she is concerned by Israeli finance minister Bezalel Smotrich’s threat to sever ties between Palestinian and Israeli banks.

Under a longstanding agreement, Israeli banks process payments in shekels for the services and salaries of the Palestinian Authority.

“I expect other countries to express concern about the impact of such a decision on the West Bank economy. I think this would have a very adverse effect also on Israel,” Yellen said.

Yellen said everything possible had to be done to “stabilise the West Bank’s economy”.