U.S. Prods Israel Over Intended Freeze of Palestinian Tax Money

Senior U.S. officials ask Israel to clarify Finance Minister Yuval Steinitz's statement indicating that Israel will withhold funds from the PA due to reconciliation agreement between Fatah and Hamas; PM office says 'no decision has been reached in matter'.

Senior U.S. officials have asked Israel's government to clarify a statement made by Finance Minister Yuval Steinitz, indicating that tax money which Israel collects for the Palestinian Authority will be withheld from the PA due to the reconciliation agreement between Fatah and Hamas. Officials in Prime Minister Netanyahu's bureau said last night, however, that "no decision has been reached regarding the non-transfer of money to the Palestinian Authority."

A meeting was supposed to be held yesterday between officials from the treasury and their PA counterparts, regarding the transfer of NIS 300 million in tax money which Israel collects for the PA, as part of an economic agreement between the two sides. However, on Saturday evening Steinitz decided on his own to prohibit officials from his ministry from taking part in the meeting, which was postponed one week.

Steinitz and Netanyahu - Emil Salman
Emil Salman

At 9:30 P.M. on Saturday, the finance minister informed Netanyahu of his decision, and the latter did not voice opposition. But the prime minister apparently did not understand that the meeting's delay meant a postponement in the transfer of millions of shekels that Israel owes the PA.

Steinitz made haste yesterday to give interviews to various radio stations about his decision; later he appeared on television, filmed while standing next to the cabinet's meeting room.

"I decided to put off the meeting about the transfer of money to the PA until it is clarified whether the money will be relayed to Hamas," Steinitz declared. "The burden of proof rests with the PA, which has to guarantee that not a single shekel which we collect will reach Hamas or terror organizations."

Haaretz learned that in response to Steinitz's move - at the request of the Palestinians - top U.S. officials held a meeting with a treasury official, and also with officials in the Prime Minister's Bureau.

The Americans relayed a message to Israel and the Palestinians stating that the delayed meeting be held as soon as possible, in order to set up procedures for the transfer of tax funds based on direct talks between the two sides.

Yesterday Foreign Ministry and defense establishment officials expressed anger at Steinitz's maneuvers.

"This is all a matter of spin orchestrated by Steinitz, and he did it merely to score political points," they claimed. "This is a continuation of the prime minister's exaggerated response to the agreement between Hamas and Fatah."

The officials added that "the money is going to be transferred to the Palestinians next week, in any case."