PA spokesman Qhassan Khatib said that Israel's decision was proof of "the success of the Palestinian campaign on an international level, which pressured Israel to transfer these funds."
In spite of Israel's fears that the funds would end up in Hamas hands, no special mechanism is to be established to track the funds.
Fatah and Hamas representatives are set to meet in Cairo today to discuss unity issues including security, elections and forming a government. Hamas spokesman Dr. Salah Bardawil denied reports claiming that Palestinian President Mahmoud Abbas selected Salam Fayyad to stand at the head of the interim Palestinian government.
The head of the Fatah delegation to the talks, Azam al-Ahmed said that "the goal is to understand how we implement the issues agreed upon when we signed the unity agreement."
Al-Ahmed emphasized that the main issue up for discussion at the talks was the formation of an interim government and the reformation of the Palestinian national committee. He added that they would also need to address the detainee issue and the unification of Palestinian institutions in the West Bank and Gaza.
On Sunday 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.
Due to the freeze, the Palestinian Authority was forced to withhold salaries for 150,000 government employees for the month of April.
Shalit family protests
Meanwhile, the parents of captive soldier Gilad Shalit are demanding that Prime Minister Benjamin Netanyahu provide an explanation as to why the funds were handed over to the PA without any new information about their son being received.
"The Shalit family regrets the fact that the government, on this occasion too, was quick to fold over and release PA funds which were declared frozen by the finance minister only last week," Noam Shalit said in a letter addressed to Netanyahu, Defense Minister Ehud Barak and Finance Minister Yuval Steinitz.
"After the reconciliation agreement between Fatah and Hamas and the PA's renewed sovereignty over the Gaza Strip, the PA is the one actively keeping an abducted Israeli soldier. His abductors are members of the Palestinian government," the letter stated.
- Follow Ynetnews on Facebook