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JERUSALEM (Reuters) - Israel's finance minister halted the transfer of government funds to West Bank Jewish settlements on Saturday and ordered a probe into allegations that money meant to support municipalities had been funneled to a pro-settler political group.
The money in question had been earmarked to cover security and building maintenance fees that were incurred when Israel froze settlement building for 10 months during 2009 and 2010, the Finance Ministry said in a statement.
But some of the money may have illegally made its way to the Yesha settler's council to be used for political purposes, including activities that run counter to government policy, the ministry said.
The allegations had been reported on Israeli television.
A spokesman for the Yesha council could not be reached for comment.
Finance Minister Yair Lapid, who heads a centrist party in the ruling coalition, ordered payments to be "stopped immediately" until the issue was cleared up, the statement said.
Lapid opened a investigation to determine within the week where the funds had gone.
Israel's YNet news website reported that, over the past four years, the government had transferred 148 million shekels ($42 million) to the municipalities to help compensate them for income lost as a result of the 10-month freeze, declared under U.S. pressure to help restart peace talks.
Most countries consider the settlements Israel has built in the West Bank, land that it captured in a 1967 Middle East war, to be illegal. Palestinians say the continued presence of Jewish settlements will deny them a viable state.
(Reporting by Ari Rabinovitch; Editing by Kevin Liffey)