Israel to release PA tax funds

Treasury to make millions suspended following Hamas-Fatah deal available for Palestinian Authority's use

Elior Levy|Published: 05.16.11 , 00:00

Israel will soon release the Palestinian Authority's suspended tax fund, Palestinian Prime Minister Salam Fayyad's office said Sunday.

Israel suspended the transfer of some NIS 300 million (approx. $85.3 million) in tax and customs funds collected on behalf of the Palestinian Authority, following the Fatah-Hamas reconciliation deal.

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The decision was made following Jerusalem's concerns that the funds may find their way to Hamas' hands and would be used to sponsor terrorism.

In what seems to be a move inspired by the international community's criticism of the move, Finance Minister Yuval Steinitz ordered Treasury officials to coordinate the funds' transfer with their Palestinian counterparts.

Steinitz said the decision was made "after Israel received several assurances and clarifications that the money would not find its way to terrorists' hands and that none of the procedures applied so far would change.

The finance minister added that should any of the funds "arrive at problematic destinations" Israel would know what to do in order to secure its interests.

Ramallah sources said that Fayyad was told of Israel's decision to release the funds by the Quartet's Middle East envoy Tony Blair and by US Secretary of State Hillary Clinton.

Fayyad claimed last week that the suspension of the funds had prevented the PA from paying the wages of over 150,000 employees, and had shaken the PA's destabilized finances even further.

Fayyad implored Arab nations to pledge funds for the PA, saying it was the Arab world's "moment of truth."

Attila Somfalvi contributed to this report