Israel to Transfer NIS 250m to Palestinian Authority, Netanyahu Announces

Decision comes in wake of financial crisis facing West Bank.

Prime Minister Benjamin Netanyahu decided on Tuesday night to transfer NIS 250 million to the Palestinian Authority, in light of protests in the West Bank and the difficult economic situation there.

The transfer is intended to enable the PA to pay salaries of government staff, who have not received full salaries since June.

Netanyahu announced that he had ordered the tax money it collects for the Palestinians to be paid in advance. The money in question is 50 percent of the total amount Israel collects from Palestinians at checkpoints each month for the PA under an agreement between the sides.

In accordance with interim peace deals, Israel collects millions of dollars in customs, border and some income taxes each month on behalf of the Palestinians and relays them to the West Bank government.

Netanyahu met with Finance Minister Yuval Steinitz on Tuesday evening to discuss how Israel could help the Palestinian Authority overcome the financial woes, which are threatening its stability. At the end of his consultation with Steinitz, Netanyahu sent a message on the matter to Palestinian President Mahmoud Abbas and PA Prime Minister Salam Fayyad via Netanyahu's envoy Yitzhak Molcho.

The prime minister said on Tuesday that Israel is taking several steps to help the Palestinians overcome the economic crisis and that it was in our joint interest, that they do.

Also on Tuesday, Fayyad announced a package of subsidies and tax cuts in an effort to quell protests against the high cost of living in the West Bank and the government's failure to pay full salaries to civil servants.

The prime minister has been the target of several days of demonstrations in the Palestinian territory, where many residents blame him for their financial woes. They have been largest internal protests against the Palestinian self-ruling government in its 18-year history.

Netanyahu and Abbas - September 2010