Israel will resume as early as Sunday the transfer of millions of dollars in tax funds to the Palestinians for the first time in 17 months. Israeli Prime Minister Ehud Olmert told his cabinet steps taken by Palestinian president Mahmoud Abbas to try to rein in armed groups could also lead to progress on the diplomatic front.
Senior Israeli and Palestinian officials said the tax money would be transferred to the emergency government Abbas formed in the occupied West Bank after he ordered the dissolution of the unity cabinet led by Hamas.
In addition to resuming automatic transfers of tax revenues worth some $50 million each month starting July 1, Israel said it would start unfreezing the hundreds of millions of dollars in tax funds it has been accumulating since transfers were first halted on Feb. 1, 2006, following Hamas' election victory.
"Everything that needed to be agreed upon has been agreed," a senior Israeli official was quoted as saying by Reuters. "From July 1, there will be automatic transfers of the tax money. It is supposed to happen now, Sunday or Monday."
Palestinian officials estimate Israel is holding more than $700 million.
"The conduct of the new Palestinian government creates avenues for cooperation that were impossible previously because Hamas was an indivisible part of this government," Olmert told his cabinet on Sunday.
Olmert said recent orders issued by Abbas, aimed at banning West Bank militants from carrying arms and curbing Hamas's influence in the territory, "certainly help in creating, slowly and carefully, avenues for cooperation between us and them".
This cooperation, Olmert said, "will also, without a doubt, enable us to make progress on the diplomatic track".
