Israel is considering restricting debt collection from the Palestinian Authority in a bid to ensure financial and political stability, following a series of meetings U.S. envoy Hady Amr held with Israeli and Palestinian officials this week.
Amr, the U.S. deputy assistant secretary of state for Israel and Palestinian affairs, ended his week-long visit to Israel and the West Bank on Friday.
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Officials who met with him told Haaretz he had voiced his concerns regarding the Palestinian Authority's financial situation, urging Israel to act to increase the PA's cash flow.
President Mahmoud Abbas has faced growing criticism following the death of one of his most prominent critics, sparking a wave of protests across the West Bank.
On Sunday, the cabinet said Israel will withhold $180 million in tax revenue it collected last year on behalf of the Palestinian Authority, or about 7 percent of the PA's total tax revenue, to offset stipends paid to militants and their families.
Under a 2018 law, Israel calculates each year how much it believes the Palestinian Authority has paid in stipends to militants, and deducts that amount from the taxes it has collected on the Palestinians' behalf.
Taxes collected by Israel form about half of the income of the Palestinian Authority, which exercises limited self-rule in the West Bank.
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In his meetings in Jerusalem, Ramallah, Bethlehem and Tel Aviv, Amr also sought collaboration to bring humanitarian relief to the Hamas-controlled Gaza Strip, which is still reeling from the aftermath of the latest round of fighting with Israel in May.
A statement from the U.S. Embassy in Jerusalem said Amr's "visit was guided by the objective of the United States to advance equal measures of freedom, security and prosperity for Israelis and Palestinians alike in ways that are tangible and achievable in the near term and beyond."
"His visit successfully advanced the goal of deepening understanding with Israelis and Palestinians in this regard," the statement read.
The deputy assistant secretary, who also met with civil society and private sector representatives alongside Israeli and Palestinian government officials, "also discussed issues ranging from human rights and the rule of law, economic development, energy, water and regional cooperation to the urgent need for humanitarian relief in Gaza," according to the embassy.