Businessman Gad Zeevi won't be making the $45 million interest payment he owes Israel's banks today, said a source at one of the banks.

Talks between businessman Gad Zeevi and a group of Israeli banks regarding interest payments due today are not progressing, admitted a source near Zeevi earlier Thursday afternoon.

The banking source added that the banks are unlikely to reach decisions today on the response to Zeevi's default.

No confirmation has been obtained from Zeevi himself.

Zeevi was due today to make a $45 million interest payment on $700 million or so borrowed from a group of Israeli banks. He borrowed the money to purchase a 20% stake in national phone company Bezeq from British firm Cable & Wireless.

The loans were extended by Bank Hapoalim (30%), Bank Leumi (30%), First International (16%), Discount Mercantile (about 12%), Israel Discount Bank (about 12%), Union Bank of Israel and Mizrahi Bank.

Zeevi's collateral for the loans is the Bezeq shares he bought.