By Ali Sawafta
RAMALLAH, West Bank (Reuters) - Palestinian Prime Minister Salam Fayyad urged his compatriots in the occupied West Bank on Sunday to boycott all Israeli products, upping the ante in a standoff with the Jewish state.
Tensions between Palestinian and Israeli leaders have risen since the United Nations General Assembly voted to recognize Palestinian statehood last month, a move opposed by Israel and its ally, the United States.
Israel retaliated by announcing last week that it would dock for four months the customs revenue it collects on the Palestinians' behalf - money the Palestinian Authority needs to function. It had already withheld December's revenues.
"Today, I call upon citizens to boycott Israeli products as an answer to the aggression directed against us, to defend our right to survive," Fayyad told reporters in the West Bank city of Ramallah.
"We will take the necessary steps to implement that."
Fayyad had previously angered Israel by issuing calls to avoid buying Israeli goods produced in Jewish settlements in the West Bank, but Sunday's call extended the call to all Israeli goods.
Israel has already accused Palestinian President Mahmoud Abbas of violating peace accords by sidestepping stalled negotiations and securing a status upgrade at the United Nations.
Fayyad's boycott call may be tough to implement, as Israel is the Palestinians' biggest trading partner, and Israeli food and manufactured goods are staples of the Palestinian market.
The Palestinians imported goods worth around $3 billion from Israel in 2011, while exporting only $618 million worth, according to the Palestinian Central Bureau of Statistics.
Trade within the occupied West Bank and with neighboring countries is largely governed by Israel, which controls the import of some construction and agricultural equipment that it says could have military uses.
Earlier this month, Israel withheld its December transfer of customs revenue to the Palestinians, saying the money would be used to start paying off $200 million owed to the Israel Electric Corporation.
Fayyad called on Arab countries to make good on pledges to make up for any funds Israel withdraws from the Palestinians as punishment for its decision to go the United Nations.
"I call the Arab Safety Net to implement immediately its pledges to provide $100 million," Fayyad said. "I call for an exceptional Arab League meeting to look into the needs of the Palestinians."
Arab countries have yet to provide the exceptional funds.
(Writing by Noah Browning; Editing by Kevin Liffey)