A Hamas leader died in Israeli custody in the West Bank, Palestinian authorities and the group said Friday, as Israeli attacks against unarmed Palestinians continued unabated in Gaza.

Mustafa Muhammad Abu Ara, 63, died after being moved from a prison in southern Israel to a hospital, according to a joint statement by the Palestinian Authority's prisoners affairs body and the Palestinian Prisoners' Club watchdog.

"We mourn the passing of the leader and prisoner Sheikh Mustafa Muhammad Abu Ara and hold the occupation responsible for his assassination through deliberate medical neglect," Hamas said in a statement.

Abu Ara was arrested in October while suffering severe health problems, the Palestinian body and the watchdog said.

During his detainment he was subjected to torture and starvation, they added.

Israel's military did not immediately respond to a request for comment.

Palestinian authorities accused Israel this month of waging an abusive "war of revenge" against Palestinian detainees since the start of the Israel-Hamas war.

At the time, the Israeli military said it "rejects outright allegations concerning systematic abuse of detainees", adding that it acts within international law.

Cooperation with Palestinian banks

The United States on Thursday called on Israel to extend its cooperation with Palestinian banks for another year, to avoid blocking vital transactions in the occupied West Bank.

"I am glad that Israel has allowed its banks to continue cooperating with Palestinian banks, but I remain convinced that a one-year extension of the waiver to facilitate this cooperation is needed," US Treasury Secretary Janet Yellen said Thursday, on the sidelines of a meeting of G20 finance ministers in Rio de Janeiro.

In May, Israeli Finance Minister Bezalel Smotrich threatened to cut off a vital banking channel between Israel and the West Bank in response to three European countries recognizing the State of Palestine.

On June 30, however, Smotrich extended a waiver that allows cooperation between Israel's banking system and Palestinian banks in the occupied West Bank for four months, according to Israeli media.

The Times of Israel newspaper reported that the decision on the waiver was made at a cabinet meeting in a "move that saw Israel legalize several West Bank settlement outposts."

The waiver was due to expire at the end of June, and the extension permitted Israeli banks to process payments for salaries and services to the Palestinian Authority in shekels, averting a blow to a Palestinian economy already devastated by the war in Gaza.

The Israeli threat raised serious concerns in the United States, which said at the time it feared "a humanitarian crisis" if banking ties were cut.

According to Washington, these banking channels are key to nearly $8 billion of imports from Israel to the West Bank, including electricity, water, fuel and food.