A bill proposal was passed into law on Monday evening to deduct terrorists' salaries from roughly $130 million in monthly tax revenues Israel collects on behalf of the Palestinian Authority.
In a bipartisan vote, 87 MKs supported the legislation, while 15 opposed it.
Under the new law, which was sponsored by MKs Elazar Stern (Yesh Atid) and Avi Dichter (Likud), money that would otherwise go to pay stipends to roughly 35,000 families of Palestinian terrorists and their families will be automatically frozen in accordance with the Paris Protocol—without the need for a special approval from the Cabinet.
According to the law's sponsors, the PA paid terrorists over NIS 4 billion over the past four years from its so-called "martyrs' fund," with NIS 1.2 billion (roughly $330 million) being paid in the last year alone.
"May your house come to ruin," Dichter wished Palestinian President Mahmoud Abbas in Arabic, echoing Abbas' own ill-wish to US President Donald Trump. "Mahmoud Abbas, instead of your Authority investing money in health and education, you invest seven percent of your budget into terrorism?!"
"The PA has turned itself into a factory that employs murderers of people—Jews, mostly, but also Muslims, Christians, Druze, Circassians and others, including tourists," Dichter continued. "It's very easy to be accepted to (work in) this factory. All you have to do is murder Israelis, be arrested or killed, and you're hired. Mahmoud Abbas and his aides—if you don't change the entry criteria to this factory, you will go to sleep one day and wake up (with your funds) cut."
According to Dichter, the legislation "is meant primarily to send a values- and principles-based message that the State of Israel will not lend a hand to the transfer of money to terrorists. In addition, we believe the law would force the PA to rethink the financing of terrorists and incentivizing any kind of terrorism."
Stern, meanwhile, argued that "this historic law will significantly weaken the encouragement of terrorism by the PA. It is our duty to stop the economic incentive the PA gives terrorists, an incentive that encourages others to commit terror attacks. That way, any Palestinian youth will realize it's not worth it for him to choose the path of terrorism. No more encouraging terrorism at our expense."
Stern said the withheld money would be put aside, giving the Israeli government discretion on whether to return it to the Palestinians at some point.
A previous draft version of the bill stipulated the money would go to Israeli victims of Palestinian attacks, but it was scrapped due to potential legal complications. Stern claimed that the martyrs' fund pays higher benefits to those involved in more serious attacks.
"It's not only that they encourage their people to take terror actions. They even encourage them to cause more casualties of innocent people," Stern said.
During the stormy session that preceded the vote, Joint List MK Jamal Zahalka accused Stern and Dichter of being "shameless, uncultured. They support the murder of Palestinian children. You all supported the bombing of Gaza. You murdered Palestinian children. Who among you came out against it?"
Dichter, the former director of the Shin Bet, is "responsible for the murder of thousands of people," Zahalka charged. "You're hypocrites and thieves, stealing from the Palestinian people the money they deserve. You're the occupiers, the oppressors, the murderers, the thieves."
As he took the podium, Joint MK Ahmad Tibi shot a snide remark at Likud MK Nava Boker, telling her "if you don't like what I'm going to say, get out. (With your) IQ, you won't understand what I'm saying anyway. Anyone who doesn't like it, get out."
Tibi then accused the Israeli government of "holding every year a memorial service for murderers and terrorists right here in the Knesset and calling them national heroes, even though one of them (Meir Har-Zion) slaughtered an entire Bedouin family with his own hands. It's double standards to call the Palestinians terrorists and the murderers of Palestinians heroes."
Outraged by the proposed legislation, Tibi charged that "This is Palestinian money and anyone who deducts it is committing armed robbery by the state. This is the money of the Palestinian workers in Israel."
Joint List MK Hanin Zoabi joined the chorus of accusations, charging, "What haven't you done? Occupation, siege, not allowing in food. What war crimes haven't you committed against the Palestinian people, these brave people? You put 2 million people in the largest prison in the world, in a siege. Keep being stupid. Stupidity is good. You're a camp (the right wing) that managed to demonize a nation—even the Palestinians are not considered as human beings. I don't understand the psychology of Israeli politics."
She also attacked the left-wing parties, saying, "They need to ask themselves what mistakes they've made to cause the bad ones to get stronger, cause the fascists to get stronger."
Zionist Union MK Itzik Shmuli responded, accusing her that she "wants me in the sea."
Zoabi continued unabated, "You took the resources, the water, the land—but you won't take the spirit. Not with a siege and not with the occupation. This camp (the left wing) has no values, and that is why the bad people's camp grew stronger."
Dichter shot back at the Arab MKs, accusing that "You've been brainwashed by the Palestinian Authority."
After the bill's approval, Defense Minister Avigdor Lieberman wrote on Twitter: "We promised to halt the stipend free-for-all for terrorists and we have made good on our promise. It's over. Every shekel that Abu Mazen (Abbas) will pay to terrorists and murderers will be automatically deducted from the Palestinian Authority's budget. Effective fight against terrorism also goes through the pocket—of the terrorists, of their families and of Abbas."
Palestinians condemn 'theft and piracy'
The Palestinians say the number of people involved in deadly attacks is a small percentage of those aided by the "martyrs' fund." They say the tax revenues, collected by Israel for them under past peace agreements, are their money, and that the Palestinian Authority has a responsibility to all of its citizens like any other government.
Saeb Erekat, the chief Palestinian negotiator, accused Israel of "theft and piracy."
"The Palestinian Authority is responsible for all Palestinians, and is responsible for the families of prisoners and martyrs within the program of social assistance," he said.
The Israeli law passed the same day that Australia said it ended direct aid to the Palestinian Authority, claiming Australian donations could increase its capacity to pay Palestinians convicted of politically motivated violence.
A few months earlier, the US Congress approved the Taylor Force Act, a bill to halt US funding to the Palestinian Authority until it stops paying stipends to Palestinian attackers and their families.
The United States is now reviewing some $200 million in assistance for the Palestinians. It has also cut some $300 million to the UN agency for Palestinian refugees and their descendants, known as UNRWA, further straining the Palestinian budget.
Stuart Force, the father of Taylor Force, an American student who was killed in a 2016 attack in Israel, attended Monday's Knesset vote. He said he was "really heartened" by Israeli lawmakers' support for the Taylor Force Act as it passed through Congress.
"When there was a possibility to come out and show my support, I jumped at it," Force said. He said the vote "will bring awareness" to the issue and hoped other countries would follow suit.
The cash-strapped Palestinian Authority, which relies heavily on the Israeli tax funds and international aid, has suffered from chronic budget problems.
Issa Qarakeh, the PA's minister of prisoner affairs, said that even if Israel halts the transfer of funds, the Palestinian government will still pay the stipends.
"When we signed Oslo Agreement, it was clear to Israel that the Palestinian Authority pays these families, and they never objected. Now they are creating a problem just to avoid addressing the real problems, which stems from the Israeli military occupation and building the settlements on our land, not the social welfare money that goes to the families who lost their source of living," he said.
The Associated Press and Reuters contributed to this story.