Israel unblocks new payment of over $140 million frozen funds for Palestinian authority

Israel has approved a new payment of more than $140 million to the Palestinian Authority after announcing it had also unblocked some funds frozen because of the Gaza war, a finance ministry spokesperson told AFP on Thursday.

Since the start of the war on Hamas, far-right Israeli Finance Minister Bezalel Smotrich has withheld payments of customs and tax duties to Palestinian President Mahmud Abbas’s administration.

But Israeli officials said on Wednesday that the government had made a 435 million shekel ($116 million) payment for duties collected for April and May.

A finance ministry spokeswoman said a further payment of about 530 million shekels for duties collected for June was approved.

Israel collects tax and customs duties for the Palestinian Authority under a 1994 protocol, which granted sole control over the territories’ borders to Israel.

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According to economists, the payments collected by Israel account for 60 percent of the cash-strapped authority’s revenues.

Palestinian Authority Prime Minister Mohammed Mustafa confirmed the 435 million shekel payment at a cabinet meeting on Wednesday.

He said the money would be used for unpaid wages for tens of thousands of Palestinian civil servants and suppliers.

Authority workers have been living on reduced wages for months and the PA has made repeated appeals for international aid.

Mustafa added that Israel still owed the authority six billion shekels in back payments. Israel stopped making the payments after the October 7 Hamas attacks in southern Israel, with Smotrich accusing the PA of backing the Islamist terrorists.

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Hamas is designated a “terrorist” organisation by the United States, the European Union and other countries. It is distinct from the Palestinian Authority.

Hamas took over Gaza in 2007 following a violent struggle with Abbas’ Fatah faction, with the Palestinian Authority’s influence limited to Palestinian-run parts of the occupied West Bank.

According to Israeli media reports, Smotrich only agreed to make the new payments under a deal in which the government recognised five wildcat settlements in the West Bank.

In June, he ordered the transfer of about $35 million of the funds collected on behalf of the Palestinian Authority to help Israeli “victims of terrorism”. The decision was condemned by the US government as “extraordinarily wrongheaded”.