The Palestinian economy is "weeks away" from a "full crisis" as two Israeli banks, Bank Hapoalim and Israel Discount Bank, plan to cease crucial correspondent banking services. These banks are the sole Israeli facilitators of cross-border payments for the Palestinian financial sector, essential for importing necessities like food, water, and electricity.

Discount Bank will stop services from September 1, followed by Bank Hapoalim on October 1. This move follows years of Israeli government pressure on the Palestinian Authority. Yahya Shunnar, head of the Palestine Monetary Authority, warned of potential shortages and supply chain disruptions, stating, "Nearly every part of economic and daily life is at stake." He described the situation as a "cliff edge" that will halt cheque clearing and interbank settlement.

While a waiver previously protected these services, it has faced repeated uncertainty. The Israeli finance ministry stated it's discussing measures with the banks to ensure continuation, citing increased exposure to international lawsuits and sanctions. However, a recent US and UK review found Palestinian counterterrorism funding mechanisms met international standards.