US Treasury Secretary Janet Yellen has warned of the risk of a “humanitarian crisis” if Israel cuts off a crucial financing channel to Palestinian banks, AFP reports.

“I’m particularly concerned by Israel’s threats to take action that would lead to Palestinian banks being cut off from their Israeli correspondent banks,” she told reporters in Stresa in northern Italy, where a meeting of G7 finance ministers is due to open.

“These banking channels are critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2bn a year in exports on which Palestinian livelihoods depend.”

Asked what the United States and G7 might do in response, Yellen said she had written to Israeli Prime Minister Benyamin Netanyahu months ago about the economic situation in the occupied West Bank.

“And as I said, I believe it would create a humanitarian crisis in due course if Palestinian banks are cut off from Israeli correspondence,” she said.“Certainly, this is a view that we will voice.”