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Bildkombo Benjamin Netanjahu und Mahmud Abbas
Image: Reuters/C. Allegri
PoliticsMiddle East

Israel transfers withheld taxes to Palestinian Authority

December 2, 2020

The move ends a six-month row over an Israeli plan to annex part of the West Bank. Under the Oslo Peace accords, Israel collects taxes and duties on the PA's behalf, but then quite often withholds them.


Israel on Wednesday ended a six-month standoff with the Palestinian Authority (PA) over its plans to annex parts of the occupied West Bank by agreeing to transfer more than $1 billion in taxes and customs duties.

Under the Oslo peace accords, Israel collects the money on behalf of the Ramallah-based PA, which is led by Mahmoud Abbas.

The taxes are a key source of revenue for the Palestinian Authority, which administers parts of the Israeli-occupied West Bank.

Officials slashed the salaries of tens of thousands of civil servants when the row broke out, worsening the economic upheaval caused by the coronavirus pandemic.

Read more:  Mike Pompeo backs West Bank settlements in landmark visit

Both sides resumed contacts last month following President-elect Joe Biden's victory in November's election.

Biden is a long-time opponent of annexation and is expected to use his term to renew efforts to broker an end to the decades-long conflict.

Changes in Washington likely to impact the region

Hussein al-Sheikh, a close aide to Palestinian President Mahmoud Abbas, confirmed to the Associated Press that the PA had received some 3.8 billion shekels (around $1.1 billion or €1 billion) from Israel.

Israel's Finance Ministry said the funds were transferred following the approval of the Israeli Security Cabinet last month.

Israel said it would deduct an amount equal to what the Palestinian Authority pays to the families of prisoners and those killed in the conflict, including militants implicated in attacks that killed Israelis.

President Donald Trump's Mideast plan, unveiled in January, would have allowed Israel to annex a third of the West Bank, including all its Jewish settlements.

The Palestinians immediately rejected the plan, and Abbas announced in May that he was cutting all ties to the US and Israel, and would no longer abide by past agreements with them.

Israel shelved its annexation plans in August after the United Arab Emirates and Bahrain agreed to normalize relations.

Read more: Bahrain foreign minister arrives in Israel for historic visit

But Israeli Prime Minister Benjamin Netanyahu said the pause was only temporary.

On Wednesday, his government looked to be teetering on the brink of collapse after his Blue and White coalition partner moved to dissolve parliament and hold fresh elections, which could lead to the fourth general election in two years in Israel.

jf/msh (AP, AFP)

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