Finance Minister Bezalel Smotrich opposes a U.S. demand that Palestinian Authority funds confiscated by Israel be used to finance a humanitarian aid distribution plan designed to bypass Hamas, with American backing.
Three political sources told ynet that Smotrich objects because of his refusal to allow the Palestinian Authority any foothold in Gaza, even indirectly. Due to the minister’s opposition and because the designated budget is under his authority, the move is currently stalled.
As part of discussions on future steps in the Gaza Strip, Israel and the U.S. understand that, alongside military measures being considered to disarm Hamas, the problem of the terror group’s economic strengthening through humanitarian aid must also be addressed. Against this backdrop, officials are considering a return to aid distribution mechanisms that bypass Hamas.
According to political sources, the proposal under consideration involves redeploying humanitarian aid distribution centers operated by an organization not affiliated with Hamas, similar to the Gaza Humanitarian Foundation (GHF) model used last year. The plan envisions setting up centers near the Yellow Line, where the IDF would be able to secure them.
The Americans, sources said, demanded that the initiative be funded using Palestinian Authority money that had previously been transferred monthly to Gaza and has been confiscated by Israel since the start of the war. The sum amounts to 275 million shekels per month, accumulating to about 5 billion shekels. Reuters reported Friday that the Americans also want the money used for additional Gaza reconstruction efforts.
Under Israeli law, the funds can be confiscated, but cannot be used without the Palestinian Authority’s consent. The Americans clarified that the Palestinian Authority agrees to the use of the confiscated funds. That, according to sources, is at the heart of Smotrich’s opposition — to avoid any agreed or coordinated move that could give the Palestinian Authority even an indirect foothold in Gaza.
According to political officials, countries that pledged money for Gaza’s reconstruction do not want to invest before they know Hamas is being disarmed, to avoid pouring money into projects that could later be destroyed in additional Israeli military operations.
The military previously opposed the humanitarian aid distribution centers operated by the Gaza Humanitarian Foundation last year, which encountered difficulties and ultimately failed, managing to provide aid to only a small portion of Gaza’s population. While the IDF agrees with the principle that humanitarian aid must be separated from Hamas and that Gaza residents’ dependence on the group should be reduced, it does not want to become involved in controlling another population.
Some in Israel believe the move could now succeed more effectively due to the IDF’s control of the Yellow Line. This comes amid concerns that Hamas is significantly strengthening itself through the entry of 600 aid trucks per day and through smuggling operations tied to the humanitarian aid system.