Finance Minister Bezalel Smotrich's wants to relabel funds for Haredi educational institutions that do not teach core studies as part of the main Ministry of Education budget.
The Israeli bank has written to the UN Palestinian refugee agency saying it was seriously concerned that money from the account was reaching terrorist groups.
Finance Ministry sources say the delay is because Minister of Finance Bezalel Smotrich seeks to make coalition party allocations a fixed part of the budget.
US Senators, previously critical of Riyadh, met with Saudi Crown Prince Mohammed bin Salman earlier this month in al-Ula in northwest Saudi Arabia, "Bloomberg" reports.