RAMALLAH, Feb 12 — The United States has denied accusations it is pressuring banks to stop dealing with the Palestinian government, whose relations with Washington have been plummeting.

Several Palestinian officials have accused the US of trying to force banks not to deal with transactions linked to the Palestinian Authority, which has limited self-rule in the occupied West Bank.

"The United States has not requested that foreign donors restrict assistance to the Palestinians, nor has it requested that financial institutions cease transfers to Palestinian Authority (PA) bank accounts,” a US official told AFP late yesterday.

"We are aware of media reports suggesting this has occurred. Those reports are incorrect.”

On Sunday, senior Palestinian official Hussein al-Sheikh charged that Washington was launching a "financial siege” on the PA.

"Major international financial institutions and parties have begun to accede to an American request to impose a tight financial siege on the Palestinian Authority,” he told AFP.

"Washington has asked for financial aid given to the authority to be stopped, and it has also issued a circular to banks not to receive transfers for the authority’s accounts.”

Palestinian foreign minister Riyad al-Maliki has said on local radio that the US was using "all means to press Arab countries to stop financial support for our people”.

Relations between the US and the Palestinians have broken down since President Donald Trump recognised Jerusalem as Israel’s capital in late 2017.

The Palestinians consider the eastern part of the city their capital and have boycotted the Trump administration since.

In response the US has cut more than US$500 million (RM2.04 billion) in annual aid to the Palestinians, mostly to the United Nations agency for Palestinian refugees.

The cuts have worsened long-term financial shortfalls for the PA, which is heavily reliant on international aid. — AFP