The US Supreme Court has rejected a request by the Palestinian Authority (PA) and the Palestine Liberation Organization (PLO) to suspend enforcement of a $655.5 million judgment compensating American families whose relatives were victims of terrorist attacks in Israel in the 2000s.

On Monday, Justice Sonia Sotomayor denied the application filed by the Palestinian organizations without comment or referring it to the full court, Courthouse News Service reported.

In their appeal, the PA and PLO argued that the massive payout “would plunge the Palestinian economy into a deep recession, including a sudden dramatic increase in the already high unemployment rate, and failure of critical social services.” They added that it would likely trigger “widespread violence” in the West Bank and destabilize Israel, Jordan, and Egypt.

“Immediate enforcement would devastate the remaining public safety, security, the judicial system, health care, public schools, public works, communications, transportation, and reconstruction,” the PLO wrote.

The case stems from lawsuits brought by the families of US nationals killed or injured in six terrorist attacks between 2002 and 2004 during the Second Intifada, a Palestinian uprising against the Israeli occupation marked by attacks on soldiers and civilians.

In 2016, a federal appeals court overturned a verdict holding the PLO and PA liable, citing a lack of jurisdiction. The case was revived after Congress passed a law in 2019 allowing Americans to seek compensation for terrorist acts committed overseas. Last year, the Supreme Court upheld the legislation enabling the lawsuits.

The West Bank is facing an acute financial crisis as Israel withholds billions in tax revenue that it collects on behalf of the PA, claiming that the money is used to fund terrorism. According to Al Jazeera, these transfers normally account for around 60% of the PA’s budget.

Palestinian Finance Minister Estephan Salameh has described the withholding of funds as a “financial siege” imposed by Israel. He said in February that this year would be “the most financially difficult” since the PA was established in the early 1990s.

Gaza, a Palestinian enclave claimed by the PA but controlled by Hamas, has been devastated by Israeli airstrikes and a ground invasion launched in response to Hamas’ surprise attack in October 2023.