Israel sends Palestinians over $1 billion in withheld funds

Ramallah - The Palestinians stopped coordination with Israel in May in response to Israeli plans to annex parts of West Bank.

Israel has released more than $1 billion (Dh3.67 billion) in funds withheld from the Palestinian Authority, a Palestinian minister said Wednesday, two weeks after coordination between the sides was renewed.

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"The #Israeli government transfers all financial dues of the clearance to the account of the #Palestinian Authority, amounting to three billion and 768 million shekels," civil affairs minister Hussein Al Sheikh wrote on Twitter.

He was referring to taxes, including customs duties, that the Jewish state collects on behalf of the PA.

In May, the Palestinians stopped coordination with Israel, with PA leader Mahmud Abbas saying it was in response to Israeli plans to annex parts of the West Bank.

Israel later put its annexation plans on hold, in return for an agreement to normalise ties with the UAE, announced in August.

In halting the cooperation with Israel, the PA also stopped accepting the transfer of taxes -- particularly customs duties -- collected by Israel on its behalf.

The PA announced last month that it would restore coordination with the Jewish state.

Earlier this week, an Israeli official told AFP on condition of anonymity that the "security cabinet approved transferring the money to the PA", without specifying the amount.

Palestinian prime minister Mohammed Shtayyeh said on Monday the Palestinians had "a right" to the funds, expected to relieve pressure on a Palestinian economy in the grips of a severe budgetary crisis.

- Prisoner payments -

Employees "will take everything they are owed. They have been patient for months and it's only a matter of a little more time to make everything clear," Shtayyeh said.

Deprived of this income, the PA had to cut civil servants' salaries, at a time when the Palestinian economy had begun grappling with the impact of the novel coronavirus pandemic.

The World Bank said last week the Palestinians were facing the "triple crises" of the Covid-19 pandemic, a "severe economic slowdown" and the "political standoff" with Israel that disrupted the tax transfers.

The transfers, which represent the equivalent of 35 per cent of the PA's projected tax revenues this year, will not however be enough to balance its budget, according to the bank's calculations.

Although Israel has transferred the funds, it continues to withhold amounts allocated for Palestinian prisoners.

Each month the PA makes payments to prisoners or their families.

Israel sees the payments to those who have carried out attacks against Israelis as encouraging further violence.

The PA describes the payments as a form of welfare.

• MENA