Israeli sources reported Sunday that the government of Prime Minister Benjamin Netanyahu had decided to withhold the tax transfers to the Palestinians, in response to the initial reconciliation agreement between Fatah and Hamas.
The Israeli newspaper "Yediot Aharonot" reported: "The Israeli Finance Minister Yuval Steinitz has canceled the latest routine delivery to the amount of NIS 300 million ($ 88 million) by Israel from the proceeds of customs and other revenues collected on behalf of the Palestinians."
The newspaper added Israeli officials decided also to cancel talks with the Palestinian Authority aimed at updating the mechanism for the transfer of taxes which amount to between US$1 billion TO us$ 1.4 billion annually. This sum constitutes two-thirds of the PA's budget.
For his part, said Saeb Erekat, a member of the Executive Committee of the Palestine Liberation Organization conveyed that the Palestinian side had not been informed of this Israeli action, while a spokeswoman for the Israeli Minister of Finance refused to confirm what was reported by the newspaper.
Erekat was quoted as saying: "This is a very serious because this is our money, and we condemn this strongly." And he added: "Israel has started to go to war even before the formation of the new Palestinian government is formed. " Erekat went on to say "these funds are Palestinian and not Israeli, and Israel is not entitled to withhold them."
He added that "This step comes before the formation of the government, which must not be a pretext for Israel to carry out such steps as to withhold the tax money."
The Israeli foreign minister, Avigdor Lieberman, had threatened on Thursday to resort to "a large arsenal of retaliatory measures" against the Palestinian Authority following the conclusion of an initial agreement between Fatah and Hamas. He added that Israel could also freeze the transfer of taxes collected in Israel for the Palestinian Authority. (Credit: yallafinance .com)