Analysis

Israel Tampers With Palestinian Authority Funds – and Could Get Hamas Rockets in Response

Transfer freeze is attempt by Netanyahu to portray himself as the strong right against Gantz’s weak left ■ Any move Abbas makes to reduce prisoners’ payments will cause him a huge domestic crisis

Families of Palestinian prisoners held in Israeli jails hold their pictures during a protest against wage cuts, in Gaza City, February 7, 2019.
braheem Abu Mustafa/Reuters

The decision by the security cabinet on Sunday to freeze the transfer of 500 million shekels ($138 million) of Palestinian Authority taxes as a sanction for its support of security prisoners was the result of political constraints. The law allowing the funds to be frozen was passed in July, but no politician seemed in any hurry to implement it.

The murder of Ori Ansbacher in Jerusalem earlier this month led to renewed discussion of the assistance the PA gives to terrorists and their families; the overcrowding on the right side of the political spectrum did the rest. When Naftali Bennett and Avigdor Lieberman are circumventing Prime Minister Benjamin Netanyahu on the right on the question of relations with the Palestinians, and the prime minister is busy branding himself as the strong right against Benny Gantz’s weak left, Netanyahu saw no choice but to start implementing the law.

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Between July and February nothing was done about deducting any taxes, and even during Sunday’s security cabinet meeting Shin Bet security service head Nadav Argaman delayed presenting the full data on the PA’s support of security prisoners – and got an earful directly from Bennett (which somehow leaked at the speed of light to Channel 12). 

But even now, the funds freeze relates only to the imprisoned terrorists, not to the annual assistance, slightly greater in scope, that the PA gives to the families of Palestinians who were killed in confrontations with Israel. This second clause includes help given to relatives of suicide terrorists.

And even after the security cabinet decision and the festive announcement that followed, it still isn’t clear when the tax refunds to the PA will actually be withheld.

There is some logic to the Israeli argument, which is supported by the U.S. administration, that the PA’s continued financial assistance to prisoners and families of terrorists indirectly encourages terrorism and contradicts its public statements regarding the need for peace. But in Israel they are also well aware of the ethos of the Palestinian struggle and the fact that any move PA President Mahmoud Abbas makes to reduce the prisoners’ payments will cause a huge domestic crisis for him. That’s why defense establishment heads objected to the tax freeze and sought to delay it as long as they could.

Meanwhile, one cannot ignore a certain contradiction in the claims being made by Netanyahu and the ministers. On the one hand, they pride themselves on curbing aid to terror by stopping money transfers to the PA, which is still thwarting terror in the West Bank in coordination with Israel. On the other hand, Israel is approving the transfer of money from Qatar and other sources to the Hamas regime in the Gaza Strip, which openly continues to confront Israel and use violence against it.

The Israeli decision to stop the tax transfers puts more pressure on the PA leaders than the steps the American administration has taken to reduce the financial aid to the territories. The PA is threatening to completely halt the cooperation between it and Israel. Abbas has already been quoted as saying he will transfer the PA’s last penny to the prisoners if necessary, making this his highest priority. Security coordination with Israel will not be halted because it is also a Palestinian interest, but the PA could take other measures, such as stopping all meetings in non-security channels.

The primary danger here is the slippery slope. Abbas’ highest priority is the transfer of aid to Fatah prisoners from the West Bank imprisoned in Israel. To be able to continue this he might decide, as he has already hinted, to further reduce the funds transferred to the Gaza Strip. So by freezing the tax transfers, Israel might indirectly assist in exacerbating the situation in Gaza and hastening further escalation there, contrary to its objective.

Hamas isn’t prepared to make do with what it has achieved in recent months – a boost in electricity supply and money deliveries from Qatar, along with an Egyptian decision to lengthen the hours the Rafah crossing stays open. It seems that the organization’s leaders believe that Netanyahu is more vulnerable to blackmail now, given his desire to avoid violent confrontations in the Strip before the election. This is a volatile situation and the sanctions Israel is imposing now, against the PA and indirectly against Hamas, could help spark a conflagration.

Foreign diplomats involved in contacts with the Palestinians hope that the prime minister will find a way to delay implementation of the cuts, despite the security cabinet’s decision. Meanwhile, the situation along the Gaza border fence does not bode well. Last Friday’s demonstrations passed with no deaths, but Hamas continues to play with fire. The nighttime demonstrations in the Gaza Strip have resumed and are now taking place almost daily. These demonstrations are more violent than the Friday ones and, under the cover of the darkness, many explosives and Molotov cocktails are thrown at soldiers.

The explosions along the fence are heard clearly in the Gaza border communities and are restoring the tense atmosphere, as the incendiary balloons and kites did during the summer months. Gaza, as the General Staff Intelligence Branch warned only last week, could quickly devolve into a broader escalation.