RAMALLAH -- Palestine has agreed to receive tax funds held by Israel through the transfer via Norway, but Israel has rejected this US proposal, Palestinian Prime Minister Mohammed Ishtaye said Monday.

Speaking at a weekly cabinet meeting held in Ramallah, he said Israel still rejects the US administration's proposals on the issue of clearing, such as transferring the money to Norway.

He said that the Palestinian Authority (PA) refused to accept clearance funds last month after Israel had deducted 517 million shekels ($139 million) from the total 750 million shekels.

Israel collects taxes on behalf of the PA on imports into Palestinian territories and transfers the funds monthly.