The law to deduct terrorists' salaries was passed in July 2018. Under the 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 would be automatically frozen in accordance with the Paris Protocol—without the need for a special approval from the Security Cabinet.
The document shows that NIS 550 million went to terrorists jailed by Israel, both previously and currently, in a range of payments calculated according to the length of time prisoners served in Israel. The families of "martyrs" (who died while carrying out an attack), meanwhile, received a total of NIS 687 million.
The government's decision referred only to security prisoners and their families, which explains the differences between the sums Israel decided to deduct from the money it transfers to the PA and the amount of money the Palestinian finance ministry allocated to families of martyrs.
Meanwhile, a spokesman for Palestinian President Mahmoud Abbas slammed the move by Israel, calling it is "arbitrary and violates the agreement" between Israel and the PA.
"By deducting Palestinian prisoners' salaries (from PA funds), Israel is robbing the Palestinian people of money that belongs to it, and that is completely unacceptable," Abbas's office said in a statement.
"The Palestinian president stands firm on this issue. The PA won’t allow that the livelihood of our heroic prisoners and that of the families of martyrs and wounded be harmed. This decision is arbitrary and violates the Paris Protocol signed in 1994.
"Israel's decision will have far-reaching ramifications on all levels, with the Palestinian leadership making this issue top priority during its upcoming meeting," the statement said.
In addition, Palestinian Prime Minister Rami Hamdallah slammed the move, saying Israel's decision "will disrupt economic development. Nevertheless, we won't trade our rights for money."
"This move is a continuation of Israel's racist behavior, which supports the occupation and impedes the two-state solution," Hamdallah said.
In 2014, the PA closed its Ministry for Prisoner Affairs amid international furor over the fact that money donated to the PA and used, inter alia, to fund government activities in Ramallah, also reach the ministry responsible for financing terrorists.
Shortly thereafter, the Prisoner Affairs' Authority was established but was seen as a body connected to the Palestine Liberation Organization (PLO) rather than to the PA. And so, the salaries of terrorists and their families were not included in the PA's official budget.
In 2018, the US Senate enacted the Taylor Force Act, freezing flow of aid funds to the Palestinian Authority in attempt to push back against their policy of awarding terrorists and their families with stipends, which led the PA to openly resume their payments to terrorists.
Abbas has already stated several times that salaries given to security prisoners jailed in Israel and families of martyrs would be paid even if Israel decides to deduct funds from tax money meant for the PA. This policy was apparently due to the sensitivity of the matter in the Palestinian society and in an attempt to maintain the stability of his rule.