Pakistan, July 24 -- Two major Israeli banks are preparing to end their correspondent banking relationships with Palestinian financial institutions, raising concerns over the potential economic impact on the occupied West Bank and regional stability.

Read More: Israel approves $2.3bn West Bank expansion

According to Israeli officials, Israel Discount Bank will discontinue its banking ties with Palestinian lenders on September 1, while Bank Hapoalim is expected to follow on October 1. The decision has been attributed to concerns over the risks of possible terrorism financing and money laundering, amid ongoing tensions linked to the Gaza conflict and strained relations between Israel's government and the Palestinian Authority (PA).

The b...