Hagihon, an independent corporation that took over water delivery in the 1990s, says the Church of the Holy Sepulchre owes $2.5 million, the Jewish Telegraphic Agency reported.
The newspaper Maariv said Friday the city did not bill the church for water because of its importance as a Christian shrine that brings pilgrims and tourists to Jerusalem. The church is believed to be on the site where Jesus Christ's body was entombed for three days before his Resurrection.
When Hagihon first sent the church a bill, officials apparently thought it was a misunderstanding. But the bank accounts were frozen 10 days ago. The church says it has been unable to pay its staff.
Theophilus III, the patriarch of the Greek Orthodox Church in Jerusalem, says he is trying to gather international support to put pressure on Hagihon.