Israel will not send much-needed funds to the Palestinian Authority following the decision by three European countries to recognize a Palestinian state, the country's finance minister said on Wednesday, with the country's foreign minister calling the European move “a gold medal.” ''The announcement was made in response to the criticism. To Hamas terrorists. ”
The decision by Finance Minister Bezalel Smotrich, a far-right leader who opposes Palestinian sovereignty, threatened to push the Palestinian Authority into an even deeper financial crisis. In a statement, he said he had told Prime Minister Benjamin Netanyahu that he would no longer send tax revenue to authorities that work closely with Israel to administer parts of the Israeli-occupied West Bank.
Smotrich's office said the decision was at least partially a response to Spain, Norway and Ireland recognizing Palestinian statehood, and suggested the Palestinian leadership had a responsibility to push the move forward. did.
“They are acting against Israel seeking legal, diplomatic and unilateral recognition,” Smotrich's spokesman, Eitan Fuld, said of the authorities. “If they act against the state of Israel, something must be done.”
The Israeli move drew condemnation from the White House but no threat of action was made.
“I believe that withholding funds is strategically wrong because it destabilizes the West Bank. It undermines the Palestinian people's pursuit of security and prosperity, which is in Israel's interest,” President Biden said. National Security Advisor Jake Sullivan said at a press conference. “And I think it's wrong to withhold funds that provide basic goods and services to innocent people.”
Recently installed Palestinian Authority Prime Minister Mohammad Mustafa has said the dire financial situation is at a “very serious time” in the West Bank, which has faced increasing insecurity since the October 7 Hamas-led attack on Israel. He warned that it was a contributing factor.
He said he would meet in Brussels next week with top diplomats from countries that have traditionally provided funding to the authorities. “We are going through a very difficult time in providing services to our people on the ground, and they are already under military action,” Mustafa said in a video distributed by his office. “Besides, we can't pay them to do basic things. This is war.”
Israel also recalled the ambassadors of Spain, Ireland and Norway for consultations on Wednesday morning. Israeli Foreign Minister Katz said he had summoned the ambassadors of each country to Israel and “sternly reprimanded them” after their governments decided to award gold medals to Hamas terrorists.
Prime Minister Benjamin Netanyahu's office did not respond to a request for comment on Smotrich's remarks.
Under a decades-old agreement, Israel collects customs duties and import taxes on behalf of the Palestinian Authority. These revenues make up a large portion of the Palestinian budget, especially as international aid has declined. But Smotrich, who has labeled the Palestinian Authority an “enemy,” had already postponed the transfer of the latest funds before Wednesday's announcement, according to Fuld and Palestinian officials. The Palestinian official spoke on condition of anonymity because he was not authorized to discuss the matter publicly.
The Ramallah-based Palestinian Authority is already in a deep financial crisis due to tightening Israeli funding restrictions and a weakening West Bank economy caused by the war. This month, the government was only able to pay 50% of the salaries of tens of thousands of civil servants.
Diplomats and analysts have warned that the Palestinian Authority's worsening financial problems could lead to further turmoil in the West Bank. More than 500 Palestinians have been killed in the region since Israel began its war in Gaza following an Oct. 7 Hamas-led attack, according to the Palestinian Authority's Health Ministry, many of them in clashes with Israeli forces.
Palestinians have faced increased Israeli restrictions since October 7. More than 100,000 Palestinians working in Israel were barred from entering the country, resulting in mass unemployment overnight. Near-nightly attacks, Israeli road blockades and stricter checkpoints have further strangled the Palestinian economy.
The Palestinian Authority traditionally spends a portion of the taxes collected by Israel on Gaza. After the war broke out in October, Smotrich said he would withhold that portion from the amount transferred to authorities. In protest, the Palestinian Authority refused to accept any reduction in payments.
After months of conflict over the issue, Israeli and Palestinian leaders agreed to a deal in which Norway would hold part of the revenue in trust until Israel agreed to send money to the Palestinians. The Palestinians agreed to receive reduced payments in the meantime.
Smotrich on Wednesday called on the government to immediately scrap that agreement as well.
Senior Israeli officials, including Prime Minister Benjamin Netanyahu, have repeatedly accused the Palestinian state of being internationally recognized as a “prize of terrorism” after the Oct. 7 attacks.
Most of Israel's current hardline government rejects the establishment of an independent Palestinian state, effectively ruling out peace talks to end decades of Israeli occupation.
President Biden and Secretary of State Antony J. Blinken said that after the war, Gaza should be unified with the West Bank under a “revitalized” Palestinian Authority. Israel remains vehemently opposed to the idea. The authority in its current form is also unpopular among Palestinians, who view it as complicit in the Israeli occupation.
Israeli parliamentary opposition leader Yair Lapid said he agreed with Netanyahu that the three-nation decision was “shameful,” but in a statement on social media he also called it an “unprecedented diplomatic blunder” for Israel, implicitly criticizing Netanyahu.
