The Israel Electric Corporation cut power supplies to large parts of Bethlehem on Monday, in lieu of payment for service.
The power cut was to continue for two weeks in response to the failure by the Palestinian Authority and the Yerushalayim District Electricity Company to pay their electricity bills.
The PA owes some 1.7 billion shekels ($449 million) to the Israeli electricity company, according to IEC officials, who explained that they do not anticipate receiving payment any time in the foreseeable future.
The IEC also reduced power in the Jericho area over the weekend.
The IEC said it has consulted with Israeli government officials to explore whether they can offset the debt with the taxes that Israel collects on behalf of the PA.