Palestinian President Mahmoud Abbas refused to accept its frozen tax revenues released by Israel.
Abbas said Sunday that he had refused to accept the funds because Israel had deducted some of the money to cover the Palestinians' debts for utilities and hospital bills.
Israel collects taxes for the Palestinians and then transfers it to the Palestinian Authority.
Israel withheld the collected tax revenues beginning in January after Abbas signed requests in late December to join the International Criminal Court and other international conventions as a result of the failure of the United Nations Security Council to pass a Palestinian statehood proposal.
Abbas rejected the returned funds saying Israel had deducted one-third of the money owed to them.
"We are returning the money. Either they give it to us in full or we go to arbitration or to the (International Criminal) Court. We will not accept anything else," he said Sunday.
The P.A. said last week its public employees would receive 60% of their salaries for the month of March, the Palestinian news and information agency (WAFA) reported.