On Wednesday Mahmoud Abbas signed a Palestinian bid to join the International Criminal Court.

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Israel halts $127 million in tax revenues due to Palestinians, media report says

The freeze comes after Palestinian Authority seeks to join Intl. Criminal Court

"They are following our legal step with an illegal one," PLO spokesman says

Jerusalem CNN  — 

Israel has decided to freeze the transfer of more than $127 million in tax revenues collected on behalf of the Palestinians in the wake of their bid to join the International Criminal Court, Israel’s newspaper Haaretz reported Saturday.

A Palestine Liberation Organization spokesman said that the freezing of tax revenues is an Israeli decision.

“Palestinians took a legitimate step with the ICC and we are being returned not in kind. They are following our legal step with an illegal one,” said Xavier Abu Eid, spokesman of the PLO’s Negotiations Affairs Department.

Israeli authorities couldn’t be immediately reached for comment.

On Wednesday, Palestinian Authority President Mahmoud Abbas signed a bid to join the International Criminal Court.

That move came a day after the U.N. Security Council rejected a resolution calling for Palestinian statehood by 2017, and for Israel to withdraw from the West Bank and East Jerusalem.

The bid sets the stage for the Palestinian Authority to possibly pursue war crime complaints against Israel.

The U.S. State Department, however, has said it was “deeply troubled” by the Palestinian Authority’s move, calling it an “escalatory step.”

The State Department said “direct negotiations are ultimately the only realistic path” for peace between Israel and the Palestinians.

The move “is entirely counterproductive and does nothing to further the aspirations of the Palestinian people for a sovereign and independent state. It badly damages the atmosphere with the very people with whom they ultimately need to make peace,” the State Department said.

CNN’s Irene Nasser reported from Jerusalem, and Michael Martinez wrote and reported from Los Angeles.