Israeli tax officials have rejected an appeal for compensation from the Catholic Church for the severe damage caused to the ancient Church of the Multiplication of Loaves and Fishes, in Tabgha, on the Sea of Galilee, in an arson attack on 17 June.
Under Israeli law, the government compensates victims of terrorist attacks and war for damage to property. After the incident, both Prime Minister Benjamin Netanyahu and Defense Minister Moshe Ya'alon described the attack as an 'act of terrorism'.
But Israeli tax officials now say this was not a terrorist attack and therefore does not qualify for compensation.
The Church of the Multiplication of Loaves and Fishes is one of the popular sites on the Christian pilgrim route through the Holy Land. It was badly damaged by fire and covered in graffitti, however the ancient mosaic floor was saved.
Three Jewish extremists have been charged over the attack.