A spokesman for Israeli Finance Minister Bezalel Smotrich said cooperation between Israeli and Palestinian banks will be extended for another month.
Israel has threatened to cut ties with Palestinian banks as a retaliatory measure.
Israel also banned bank transfers immediately after the outbreak of the war on Gaza.
Under the Oslo Accords, Israel collects funds for the Palestinian Authority, which exercises limited self-rule in parts of the West Bank occupied by Israel since 1967.
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Smotrich to extend cooperation between Israeli and Palestinian banks for a month