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.