Palestinian leaders began a two-day meeting on Wednesday at which they could decide to suspend security coordination with Israel, a move that would have a profound impact on stability in the occupied West Bank.
Relations between the two sides have grown dangerously brittle since the collapse of U.S.-brokered peace talks in 2014, with no immediate prospect of any resumption in negotiations.
Israeli-Palestinian security coordination is a central plank of the Oslo peace accords agreed in the mid-1990s. While Israel has occupied the territory since 1967, the Palestinians have gained greater autonomy within major cities.
Suspending coordination would have an immediate impact on stability in cities such as Hebron, Bethlehem, Nablus and Jenin, where tensions frequently flare and anti-occupation marches after Friday prayers are common.
The meeting comes after Israel halted the transfer of more than $100 million a month in tax revenues it collects on behalf of the Palestinian Authority -- retaliation for the Palestinians decision to apply to join the International Criminal Court.
"This is the right time to suspend security coordination," said Qais Abu Laila, an official in the Palestine Liberation Organization, speaking ahead of the meeting, which brings together the PLO's second-highest decision-making body.
"The feeling within the Palestinian leadership is to review the entire relationship with Israelin light of the ... decision to suspend tax revenues and the continuation of land confiscation," he said, referring to Israeli settlements.
U.S. and European diplomats are worried that if Israel does not soon release the tax revenues, which cover around two-thirds of the Palestinian budget, security coordination will de facto be suspended since the PA will be unable to pay security staff.
The European Union has in recent weeks increased transfers to the PA, in part to offset the loss of tax income this year.
While Israel has suspended transfers in the past, it has usually resumed them within weeks. This time, no change of policy is expected until after Israel's March 17 elections, or probably long after that since it will take several weeks or even months to form a new coalition after the poll.
As well as not transferring tax revenues, Israel's state-owned electricity company has cut power to Nablus and Jenin in the past 10 days to press for payment of $492 million it says is owed by the Palestinian government.
That has fueled tensions, leading to protests and unrest in several West Bank cities. Earlier this week, the Israeli military mobilized 13,000 troops in the territory in a surprise drill, a sign of the rising security concern.
While some members of the PLO are determined to suspend security coordination immediately, the more likely outcome is a partial suspension or an increase in the threat to do so.
"We need to listen to security chiefs about this matter and determine how to take a decision that will influence the Israeli side negatively while not hurting us," said Jamal Mheisen, an official in Fatah, the main party in the Palestinian Authority.
