Three American and Israeli sources have told Axios that Israeli Prime Minister Benjamin Netanyahu was pressured by US Secretary of State Antony Blinken to release Palestinian tax funds frozen by Bezalel Smotrich in early May.

After the onset of the war in Gaza, the occupation's extremist finance minister decided to suspend the transfer of all tax revenue funds.

This decision was later mitigated by the collective Israeli Occupation Government. It was decided that tax revenues would be transferred, except the portions meant for Gaza, which will be withheld by the occupation as it tries to choke the Strip in its ongoing genocidal war.

US officials have divulged that the Biden administration is growing increasingly anxious that the Palestinian Authority may collapse if tax money is not delivered quickly. This may lead to an escalation in the West Bank and Gaza as well as with Hezbollah in the North.

Tax funds collected by "Israel" for the Palestinian Authority under a bilateral agreement are a key source of income for the PA, which is already facing a severe financial crisis.

The US President reportedly gave a stern warning to Netanyahu in December over what was described as an 'icy' phone conversation. After failing to agree over the call, Biden told Netanyahu he expected him to solve this issue, saying "This conversation is over," and then hung up. 

It took more than two months before "Israel", Norway, the PA, and the US reached a deal to resume the transfer of the tax revenues.

In early May, Smotrich again halted the funds, citing the PA's efforts to persuade the International Criminal Court's (ICC) prosecutor to seek arrest warrants for Israeli officials. 

After Norway recognized a Palestinian State, Smotrich asked they return the portion of Palestinian tax income held in escrow as part of the deal, something US sources say outraged the White House.

During a meeting with Netanyahu on Monday, Blinken reminded him that the tax funds issue is critical to the US and that he must address it, according to US officials. Once again, they reported Netanyahu was uncommitted.

Blinken met with Palestinian Prime Minister Mohammed Mustafa in Jordan on Tuesday and informed him on tax income conversations in "Israel," according to a Palestinian source.

Mustafa reportedly requested Blinken expedite the flow of the funds and to press "Israel" not to withdraw its pledges that Israeli banks would conduct financial communication with Palestinian banks, which might collapse the Palestinian financial system.

US officials also worry the suspension of tax revenues is hindering the progress of Saudi Arabian attempts to put forth an aid package for the PA.

During his most recent visit to Saudi Arabia, White House National Security Advisor Jake Sullivan addressed the aid package with Crown Prince Mohammed Bin Salman.

Saudi Arabia, the UAE, Kuwait, and Qatar would contribute $10 million to the PA's budget each month, but all four have notified the US they would not do so unless "Israel" delivers Palestinian tax income, according to US sources.

Blinken to Netanyahu: Ceasefire deal can lead to calm in North

In a meeting on Monday Blinken stressed the importance of a post-conflict plan in Gaza along with the necessity of preventing the war from spreading, the State Department said in a statement.

"He reiterated that the [ceasefire] proposal on the table would unlock the possibility of calm along Israel's northern border and further integration with countries in the region," the statement reads.

This development comes as part of efforts led by the US to push forth a ceasefire proposal that would see the release of all captives in exchange for a temporary ceasefire in fear of a regional escalation.

Following their meeting, Netanyahu's office published the following statement, "Prime Minister Benjamin Netanyahu, this evening, at the Prime Minister's Office in Jerusalem, is meeting with US Secretary of State Antony Blinken. Strategic Affairs Minister Ron Dermer, National Security Council Director Tzachi Hanegbi, and the Secretary of State's adviser, Derek Chollet, also participated in the meeting."

After the bilateral meeting, an expanded meeting will take place with the participation of Netanyahu's Chief-of-Staff Tzachi Braverman, Military Secretary Roman Grofman, Foreign Policy Advisor Ophir Falk, and Coordinator for the Captives and the Missing Gal Hirsch for the Israeli side, the statement said, adding that for the US side, the meeting will be attended by Assistant Secretary of State for Near Eastern Affairs Barbara Leaf, Special Envoy for Middle East Humanitarian Issues Lise Grande and Deputy Chief of Mission at the US Embassy in "Israel" Stephanie Hallett.