American news site Axios reported that Secretary of State Antony Blinken pressured Israeli Prime Minister Benjamin Netanyahu to release Palestinian tax revenues. These funds had been frozen by the far-right Israeli Finance Minister Bezalel Smotrich in early May.
According to U.S. officials, the Biden administration is deeply concerned about the potential collapse of the Palestinian Authority if the tax revenues are not transferred soon. Such a collapse could escalate tensions in the West Bank, adding to the ongoing conflict in Gaza and rising tensions between Israel and Hezbollah in Lebanon.
These tax revenues, collected by Israel on behalf of the Palestinian Authority under a bilateral agreement, are a crucial source of income for the financially struggling Palestinian Authority.
Smotrich suspended all transfers of tax revenues to the Palestinian Authority. According to Axios, this issue was the focus of a very tense phone call between President Biden and Netanyahu last December.
Biden asked Netanyahu to resolve the matter, and when Netanyahu responded noncommittally, Biden ended the call abruptly.
It took over two months before Israel, Norway, the Palestinian Authority, and the United States reached an agreement to resume tax revenue transfers. However, the deal was short-lived, as Smotrich froze the funds again in early May.
Smotrich justified this by citing the Palestinian Authority’s legal efforts to persuade the International Criminal Court prosecutor to issue arrest warrants against Israeli leaders.
Two weeks later, after Norway recognized the State of Palestine, Smotrich demanded Norway return the portion of Palestinian tax revenues it held in escrow as part of the agreement.
U.S. officials told Axios that the White House is furious with Smotrich’s actions, not only because they destabilize the Palestinian Authority and security in the West Bank, but also because he violated a U.S.-negotiated agreement.
Blinken informed Netanyahu during their meeting in Jerusalem on Monday that resolving the tax revenue issue is crucial for the Biden administration and needs to be addressed. However, Netanyahu remained uncommitted.
A Palestinian official reported that Blinken met with Palestinian Prime Minister Mohammad Shtayyeh in Jordan on Tuesday and briefed him on the discussions in Israel regarding the tax revenues.
Shtayyeh asked Blinken to expedite efforts to release the funds and to pressure Israel not to revoke its guarantees for Israeli banks to conduct financial transactions with Palestinian banks.
On Thursday, France announced emergency aid of eight million euros to the Palestinian Authority, which is facing a financial crisis. According to a statement from the French Consulate General in Jerusalem, this support will help pay Palestinian Authority salaries, particularly for the Ministry of Health. Paris plans to support the Palestinian Authority with up to 16 million euros in 2024.
On Tuesday, the UK announced it would resume financial support to the Palestinian Authority, providing £10 million (approximately €11.8 million).
The funding will be allocated for essential services and staff salaries in the occupied Palestinian territories. The UK emphasized that a strong and effective Palestinian Authority is essential for lasting peace.
