Banks across the Gaza Strip have ceased operations, the Association of Banks in Palestine (ABP) said on Wednesday.
The closures, which come amid Israel's continued war on the besieged Palestinian enclave, were confirmed by ABP general manager Bashar Yasin to The Associated Press.
Before the announcement, many of Gaza's banks were semi-operational, including Deir al-Balah's Bank of Palestine Branch.
Israel's war on Gaza has devastated the coastal strip, destroying entire neighbourhoods and key civilian infrastructure, including schools, hospitals and roads. The onslaught has killed over 40,000 people and wounded tens of thousands more.
Israel's siege on the enclave has caused prices of basic goods to soar, with reports of Gaza residents paying as much as fifty times the regular price for food items.
Palestinian officials in the West Bank also announced on Wednesday that Israeli banks were refusing shekel cash transfers from Palestinian banks, in a move that could soon prevent Palestinians from accessing vital goods and services.
The office of Israel's finance minister Bezalel Smotrich, who in June extended a waiver that allows the country's banks to cooperate with Palestinian banks in the West Bank, had no immediate comment.
"In the next few days, banks in Palestine will be unable to finance trade operations between Palestinian and Israeli merchants, as their ability to make financial transfers is directly connected to shipping the accumulated shekel banknotes to their Israeli counterparts," the Palestinian Monetary Authority said.
It added this will prevent Palestinians from accessing vital goods and services as they will be unable to pay for them through official banking channels.
In its occupation of the West Bank and Gaza, Israel maintains tight control over Palestinian finances, including payments of tax revenues to the Palestinian Authority in Ramallah.
A report from Palestinian news agency Wafa cited the Palestinian Ministry of Finance as saying that Israel has deducted a total of 6.93 billion shekels ($1.8 billion) in recent years and has refused to return the funds.
This includes close to 2.55 billion shekels ($500 million) in deductions from tax revenues allocated for Gaza.