Prime Minister Benjamin Netanyahu announced on Monday that he would resume the routine transfer of tax revenues collected for the Palestinian Authority, ending a freeze that began in December 2012 following the Palestinian bid for upgraded status at the UN in late November.
At the time, Israel decided to withhold over $100 million in monthly tax and custom duties that it routinely collects on behalf of the Palestinian Authority according to the stipulations of the Oslo Accords. It did hand over one monthly installment in January.
The Prime Minister’s Office said the decision to resume the payments “was made as per the opinion of the security cabinet” and that “Finance Minister Yair Lapid (Yesh Atid) will direct personnel of his ministry to resume the transfer of funds” to the Palestinian Authority.
Netanyahu’s decision comes in the wake of US President Barack Obama’s visit to Jerusalem and Ramallah last week, and follows the US State Department’s announcement on Friday that nearly $500 million in aid had been unblocked for transfer to the Palestinian Authority, after Congress froze the funds in late 2012.
“To date, we have moved $295.7 million in fiscal year 2012 money… and $200 million in fiscal year 2013 assistance,” State Department spokeswoman Victoria Nuland told reporters.
According to a Haaretz report on Sunday, Obama and Secretary of State John Kerry asked Netanyahu to take several confidence-building steps vis-a-vis the Palestinians in an effort to jump-start peace negotiations between Israel and the Palestinian Authority.
Other reports say Netanyahu has been weighing a package of goodwill gestures, including prisoner releases and the transfer of authority over small parts of West Bank territory to the PA, in the effort to create a climate conducive to new talks.
The Palestinian Authority has been in the grips of a deep economic crisis, largely due to promised aid from the region and beyond going undelivered.