Of course negotiations between Israel and the PA would have prevented the Palestinians from submitting their application for a nonmember state within the U.N. But withholding their tax revenues only complicates the matter because one has nothing to do with the other. Israel signed an agreement to do so, and there's a responsibility to strengthen President Abbas, not further isolate him and his faction as has been done in the past. He also lost Gaza because Israel acted unilaterally without negotiating its withdrawal and later Hamas took over to the detriment of everyone.
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U.S. says it killed 10 AQAP Islamist militants in four air strikes in Yemen since April 23 (Reuters)
from the article: Israel threatens to close cash tap if Palestinians seek UN recognition