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Israel’s finance minister said on Wednesday that he would not transfer much-needed funds to the Palestinian Authority following the decision of three European countries to recognize a Palestinian state, while Israel’s foreign minister called the European move “a Hamas-led move.” He criticized the move as “giving a gold medal to terrorists.”
The decision by Finance Minister Bezalel Smotrich, a far-right leader who opposes Palestinian sovereignty, threatens to push the Palestinian Authority further into a financial crisis. He said in a statement that he had told Prime Minister Benjamin Netanyahu that he would no longer remit tax revenues to the authorities, who administer parts of the Israeli-occupied West Bank in close cooperation with Israel.
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 for legal, diplomatic and unilateral recognition,” Smotrich’s spokesman Eitan Fuld said of the agency. “If they act against the state of Israel, there needs to be a response.”
The Palestinian Authority did not immediately react, but Palestinian officials have previously accused Israel of withholding Palestinian tax revenues of “piracy.”
Israel also recalled the ambassadors of Spain, Ireland and Norway for consultations on Wednesday morning. Israeli Foreign Minister Israel Katz said he had summoned envoys to Israel for a “severe rebuke” following “the decision of both governments to award a gold medal to a Hamas terrorist.”
Prime Minister Benjamin Netanyahu’s office did not respond to a request for comment on Smotrich’s remarks and did not immediately comment on the European countries’ announcements.
Israel collects customs duties and import taxes on behalf of the Palestinian Authority under a decades-old agreement. These revenues make up the bulk of Palestine’s budget, as international aid has declined. But Mr. Smotrich, who has called the Palestinian Authority an “enemy,” had already delayed transferring the latest funds before Wednesday’s announcement, Mr. Fuld and Palestinian officials said. 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 deepening financial problems could lead to further turmoil in the Israeli-occupied West Bank. More than 500 Palestinians have been killed in the area since Israel began its war in Gaza in the wake of the Hamas-led attack on October 7, according to the Palestinian Authority’s Ministry of Health, many of them killed by Israeli forces and civilians. This is due to a collision.
Palestinians have faced tougher Israeli restrictions since October 7. Over 100,000 Palestinians working in Israel were barred from entering the country, causing mass unemployment overnight. Near-nightly raids, Israeli road closures and increased checkpoints have further strained 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 proceeds in trust until Israel agreed to send money to the Palestinians. Palestinians agreed to receive reduced payments in the meantime.
Mr. Smotrich on Wednesday called on the government to immediately abandon the agreement as well.
Senior Israeli officials, including Prime Minister Benjamin Netanyahu, have repeatedly condemned the international perception of a Palestinian state as a “prize for terrorism” since the Oct. 7 attacks.
Most of the current hardline Israeli 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.
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