Israel Matzav

Bank Hapoalim said in a statement that it made its decision after a review of local and international laws and "especially in light of the circumstances created." The statement did not say when the decision would go into effect, and a spokeswoman declined to elaborate.

The extent of the bank's ties with the Palestinian banks wasn't immediately known, but is believed to be significant. The Palestinian government does its local business in the Israeli currency, converting millions of dollars each month to pay its 140,000 employees.

And it's not just HaPoalim:

In a related matter, a former senior Palestinian official with knowledge of the situation said Arab banks have advised the Hamas-controlled Palestinian Authority to withdraw money from their accounts, fearing that Western countries will soon impose sanctions against the banks.

The United States and EU have branded Hamas a terrorist organization.

The official declined to be identified because he no longer holds a government position.

Also today, Israel stopped issuing VIP travel passes that allow 'Palestinian leaders' to travel between Gaza, and Judea and Samaria. There is one exception to that one: Mahmoud Abbas Abu Mazen.

With the establishment of the Hamas government, Israel no longer issues VIP free-travel cards to PA leaders who wish to travel between Gaza and Judea/Samaria. The IDF responds to Kassam rocket fire.

Arutz-7's Haggai Huberman reports that ever since 1993, the Palestinian Authority has applied for the travel permits for its legislature members and other senior figures. The VIP cards must be renewed every three months. This month, the first time the requests were made on behalf of a Hamas government, Israel did not approve, or even consider, any of the applications.

The only Palestinian Authority leader to retain VIP status is PA Chairman Mahmoud Abbas (Abu Mazen).

For those who have never heard the story that follows, it's an Arafat classic (and well known here in Israel):

Israel's concern over PA leaders' travel goes back to July 1994, when Yasser Arafat himself smuggled four heavily wanted terrorists with him into Gaza. It was the first time Arafat was permitted into Gaza. As Barry Rubin, Director of the Global Research in International Affairs Center in Herzliya, later wrote, Arafat had received permission from then-Prime Minister Yitzchak Rabin to bring dozens of "old friends" - wanted terrorists - into Gaza with him, but four terrorists who had committed the most heinous acts were kept out. In Rubin's words,

"...Arafat’s motorcade crossed from Egypt into the Gaza Strip. Israeli soldiers at the border were under strict instructions not to touch Arafat’s Mercedes or the accompanying cars, which then drove past the Mediterranean coast’s sand dunes to Gaza City. Early that evening, Arafat delivered a speech in Gaza City amid tens of thousands of people. Millions more around the world watched on television, including Rabin in his office. But his viewing was interrupted by an urgent phone call from [General Security Services head Yaakov] Peri who had just one thing to tell his boss: 'The bastard brought them in the trunk of his Mercedes.' Even after Israel accepted the return of thousands of Palestinian terrorists, soldiers and officials who had fought it, Arafat had just smuggled in the four forbidden men. When Rabin demanded that Arafat expel them, the Palestinian leader at first denied they were in Gaza, then sent them to Egypt but soon had them smuggled back." [The way I heard this story, there was one terrorist atop whom Arafat was sitting in his car when it entered Gaza that day. CiJ]