Israel transferred on Monday to the Palestinian Authority NIS 2 billion ($500 million) in tax money it had collected on behalf of the PA but withheld for the last four months, despite overdue electricity and water bills that the PA has yet to pay, the Palestinian Authority said.
The Palestinian finance ministry said it received 1.8 billion Israeli shekels ($460,000, 428,500 euros) and would from Wednesday pay December and January salary arrears to 180,000 civil servants, who have been on 60 percent pay.
Jerusalem, which collects tax funds on behalf of the PA, had been delaying the transfer of the revenues since January as a punitive measure following the Palestinians’ move to join the International Criminal Court and pursue war crimes charges against Israel.
The final agreement on transferring the funds was made over the weekend by the Coordinator of Government Activities in the Territories Maj. Gen. Yoav Mordechai and his Palestinian counterpart, Hussein al-Sheikh.
Israel has not said whether it would now resume normal monthly payments.
The Israel Electricity Corporation withdrew a petition to the High Court of Justice in which it had demanded that Israel subtract from the withheld funds a sum equal to the PA’s debt to the IEC. Justice Menahem Mazuz ruled that the IEC had no right to make such a demand.
The PA previously refused to accept a transfer of part of the withheld funds after a deduction for the debt. At the time, Qatar announced it would give the PA $100 million to prevent it from collapsing.
On Saturday Sheikh said Israel would transfer the tax monies owed for the months of March and April without deducting the PA’s debt due for electricity, water and medical services. Sheikh added that the rest of the money owed by Israel for the months of December to February would be transferred with a deduction of the said costs. In addition, a special committee comprising Israeli and Palestinian officials is set to convene in the near future in order to resolve all remaining debt claims between the two sides, he noted.
Under an economic agreement signed in 1994, Israel transfers to the Palestinian Authority tens of millions of dollars each month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports. Israel has imposed freezes on the transfer in the past, though the sanction has rarely lasted more than one or two months.
Blocking the money prevented the PA from paying the salaries of its roughly 180,000 employees, some $200 million a month.
Avi Issacharoff, Stuart Winer and AFP contributed to this report.