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The Palestinian Authority is moving to prevent Palestinian workers from taking jobs in settlements, as officials Ramallah repeatedly declare their refusal to resume direct negotiations until all Israeli construction in the West Bank is halted.

Palestinians vehemently oppose the settlements Israel has built on land they want for a future state. But with unemployment high in the West Bank, thousands of Palestinians work in settlements.

Palestinians have been key to building homes for settlers and also work in factories.

Economics Minister Hassan Abu Libda says he is drafting a law that will ban Palestinians from taking such jobs, which he expects to take effect this month.

"My population, my society, is contributing to the lifeline of settlements, so I am targeting this contribution," he said.

The Palestinian Authority will try to find alternatives for those currently working in settlements, but they will not be forced to leave, Abu Libda said.

Palestinians working in settlements in the future would be breaking the law, Libda said, but would not discuss penalties.

The legislation also bans the sale of West Bank settlement products in Palestinian shops, he said. He estimated the estimate of annual sales of settlement goods to Palestinian businesses at between $200 million to $500 million .

In recent months, Palestinian security forces have begun intercepting shipments of settlement goods to West Bank markets, he said, but would not say how much merchandise has been confiscated.

The Palestinian Authority announced earlier this year that it would deposit $150,000 every month into a new fund whose goal is to remove all products made in West Bank settlements from the Palestinian market.

The PA Economics Ministry spearheaded the creation of the fund, which it said aims to "cleanse the Palestinian market of products from the settlements and encourage local products."

"The settlements are neither legal nor legitimate. We call on Israeli companies to withdraw their investments from the settlements," Abu Libda said in January.

According to figures presented by the new fund, $500 million worth of goods produced in settlements reach the Palestinian territories every year.

Fayyad said that contributions to the fund will be recognized by the PA for tax purposes, and called on the international community to assist in halting construction in the West Bank settlements.

Among the products that the PA intends to boycott are those of Beigel Beigel (pretzels), Ahava (beauty products) and the Barkan winery, as well as a large variety of agricultural products grown in the settlements, including fruits, vegetables, eggs and flowers.