The move announced Tuesday came after Israel said Sunday it would not distribute part of the revenues, amounting to more than $138 million, because the Palestinian Authority pays terrorists’ families, The Times of Israel reported.

Under the current agreement, the Jewish state collects taxes from the West Bank and Gaza on behalf of the financially struggling Palestinian Authority.

“We refuse to receive all of the tax funds. We don’t want them. Leave them over with them,” Abbas told a delegation of U.S. Congress members and representatives from the liberal Mideast policy group J Street in Ramallah.

“I tell you honestly that if we only had 20 or 30 million shekels, which is what is paid [monthly] to families of martyrs, we will give them to the families of martyrs. I mean if the [Palestinian] Authority doesn’t have anything other than that [amount], I will pay it to the families of martyrs and prisoners and wounded persons. This needs to be understood,” he said, according to The Times of Israel.

The Palestinian Authority’s policy of paying terrorists who kill Israelis or their families has been decried by Israel and the United States.