Discount Bank announced Wednesday that it would stop providing financial services to Palestinian banks in Gaza.
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"Due the cabinet's decision to declare the Hamas-controlled Strip a hostile political entity, the bank's directorate has decided to sever all ties with banks located there," Discount said in a statement.
The rest of the Israeli banks cut all ties with Palestinian banks over the past year, mainly for fear of violating a law prohibiting the financing of terror activity.
Discount Bank's directorate said it would also examine the possibility of severing ties with all of the Palestinian Authority's banks.
Last week the governor of the Palestine Monetary Authority, George Abed, said some Palestinian banks could be forced to shut their Gaza branches by year's-end due to Israel's financial clampdown on the Hamas-controlled territory
He said Gaza's supply of shekels, the Israeli currency, could begin to run out starting next month and that individual Gazans could have trouble receiving funds from family members abroad.
According to top PA officials, the Israeli banks' decision to cut all ties to Gaza would deteriorate the already dire economic situation there.
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