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By Ali Sawafta

RAMALLAH, West Bank, Dec 16 (Reuters) – Palestinian Prime

Minister Salam Fayyad urged his compatriots in the occupied West

Bank on Sunday to boycott all Israeli products, upping the ante

in a standoff with the Jewish state.

Tensions between Palestinian and Israeli leaders have risen

since the United Nations General Assembly voted to recognise

Palestinian statehood last month, a move opposed by Israel and

its ally, the United States.

Israel retaliated by announcing last week that it would dock

for four months the customs revenue it collects on the

Palestinians’ behalf – money the Palestinian Authority needs to

function. It had already withheld December’s revenues.

“Today, I call upon citizens to boycott Israeli products as

an answer to the aggression directed against us, to defend our

right to survive,” Fayyad told reporters in the West Bank city

of Ramallah.

“We will take the necessary steps to implement that.”

Fayyad had previously angered Israel by issuing calls to

avoid buying Israeli goods produced in Jewish settlements in the

West Bank, but Sunday’s call extended the call to all Israeli

goods.

Israel has already accused Palestinian President Mahmoud

Abbas of violating peace accords by sidestepping stalled

negotiations and securing a status upgrade at the United

Nations.

Fayyad’s boycott call may be tough to implement, as Israel

is the Palestinians’ biggest trading partner, and Israeli food

and manufactured goods are staples of the Palestinian market.

The Palestinians imported goods worth around $3 billion from

Israel in 2011, while exporting only $618 million worth,

according to the Palestinian Central Bureau of Statistics.

Trade within the occupied West Bank and with neighbouring

countries is largely governed by Israel, which controls the

import of some construction and agricultural equipment that it

says could have military uses.

Earlier this month, Israel withheld its December transfer of

customs revenue to the Palestinians, saying the money would be

used to start paying off $200 million owed to the Israel

Electric Corporation.

Fayyad called on Arab countries to make good on pledges to

make up for any funds Israel withdraws from the Palestinians as

punishment for its decision to go the United Nations.

“I call the Arab Safety Net to implement immediately its

pledges to provide $100 million,” Fayyad said. “I call for an

exceptional Arab League meeting to look into the needs of the

Palestinians.”

Arab countries have yet to provide the exceptional funds.

(Writing by Noah Browning; Editing by Kevin Liffey)