Maariv daily, citing Israeli officers, said a military force took the funds allocated for the Ramallah-based Palestinian Authority after coming under fire in al-Rimal neighborhood last week.
There was no comment from the Palestinian Authority or Hamas on the report.
“Israeli soldiers were at the Bank of Palestine headquarters in Gaza last week to prevent money from reaching Hamas,” an Israel military spokesman told Maariv, without providing further details.
He added this step “was decided at the political level”.
Despite an International Court of Justice’s provisional ruling last month, Israel continues its deadly offensive on the Gaza Strip where at least 28,176 Palestinians have been killed, mostly women and children, and 67,784 others injured since Oct. 7, according to Palestinian health authorities.
Israel has pounded the Gaza Strip since a cross-border attack by Hamas, which Tel Aviv says killed nearly 1,200 people.
The Israeli offensive has left 85% of Gaza’s population internally displaced amid acute shortages of food, clean water, and medicine, while 60% of the enclave’s infrastructure was damaged or destroyed, according to the UN.