Israel Okays Handover of Palestinian Tax Money to PA

Following cabinet decision, top official tells Haaretz that Israel would consider future fund freezes if Palestinians continue UN statehood bid, form government with Hamas.

Prime Minister Benjamin Netanyahu's top cabinet ministers approved the handover of $100 million in tax money to the Palestinian Authority on Wednesday, despite the vocal opposition of Foreign Minister Avigdor Lieberman.

The FM's reason for wanting to hold the tax collection money was the possibility of it being used by a Palestinian unity government that would include Hamas – a terrorist organization in control of the Gaza Strip.

Livnat and Netanyahu Flash 90
Flash 90

On Sunday, Netanyahu appeared close to a decision, saying at a meeting of the Knesset Foreign Affairs and Defense Committee that he was considering releasing the money and that the cabinet would convene over the coming days to discuss the matter.

Netanyahu said he decided to go back on his decision to freeze the tax money due to the suspension of Palestinian activities at the UN, coupled with the fact that a Fatah-Hamas reconciliation does not appear to be on the horizon.

Lieberman was quick to respond at that meeting: "I have heard numerous infantile remarks about it being their money - as if with the money, they are free to murder or preach for the murder of Jews," the foreign minister said at a meeting of his Yisrael Beiteinu faction.

Nevertheless, Lieberman did back down on Sunday from the threats he made last week. "We will vehemently oppose the release of the funds," he said. "We won't quit the government and we won't create a crisis, but we will do everything we can to prevent the money from being transferred."

On Wednesday, the decision was finally made, with the forum of eight ruling that Israel would both transfer the withheld October tax funds as well as refrain from delaying taxes collected for the month of November.

A senior Israeli official said that Netanyahu's cabinet would consider freezing tax collection funds in the future if the Palestinians continue unilateral attempts for recognition at the United Nations or in the case of the formation of a unity cabinet between Fatah and Hamas.

Israel would track the money's use, and in the event that the funds are funneled toward terrorists, it will cut those amounts from future transactions, the official indicated.

Writing in a New York Times op-ed on Tuesday, leading columnist Thomas L. Friedman wrote that Israel would be wise to transfer the money to the PA, arguing that Netanyahu had to bolster moderate forces in the Arab world in the wake of Arab Spring uprisings.

Read this article in Hebrew: השמינייה הפשירה הכספים לפלסטינים