The socio-economic cabinet on Thursday approved Finance Minister Yuval Steinitz's proposal to allow the entry of some 5,000 Palestinian workers to Israel,
as part of the government's efforts to curb the recent social unrest in the West Bank
threatening Palestinian Prime Minister Salam Fayyad's government.
As reported by Ynet
earlier this week, the Israeli government is concerned by the growing protests in the Palestinian Authority following a series of price hikes in fuel and cooking gas.
According to government sources, the price hikes were implemented at a time when the Palestinian government's treasury is empty due to a drop in donations from the Persian Gulf. The lack of donations has led to a serious financial distress, and in August the Palestinian government failed to pay its workers' salaries.
The Israeli government is interested in seeing Fayyad remain in power, and has therefore decided to take steps to ease the PA's economic distress at the price of reinforcing the Palestinian demand for the status of a sovereign state.
As part of these steps, Steinitz's office has tightened its relations with the office of Palestinian Finance Minister Nabil Kassis, and two months ago the parties even signed a first economic agreement between Israel and the PA since 2002.
The agreement allows the PA to collect customs duties and VAT for products it has imported itself. In addition, containers delivered to the PA via Israeli ports will not be opened in Israel, but will arrive sealed at the PA border terminals.
The agreement also calls for building pipelines that will carry fuel from Israel's ports directly to special warehouses in the PA.
The agreement offers some advantages for the Israeli economy as well, as it makes it difficult to smuggle goods into Israel under the disguise of deliveries to the Palestinian Authority.
It mostly, however, gives the PA a more independent and sovereign economic status and allows it to increase its income from taxes.
The proposal approved Thursday joins a similar move approved about two months ago, which aims to ease the Palestinian population's suffering and increase employment rates in the PA. Nonetheless, the Treasury is looking for economic benefits in this move for the Israeli economy as well.
The 5,000 Palestinian workers whose entry was approved two months ago were channeled to the construction industry, which was suffering from a shortage in manpower. The new workers will be divided between the construction and agriculture industries.