Finance minister says he’s freezing PA funds over alleged support for Hamas

Smotrich submits list of statements by Palestinian Authority figures backing terror group, urges review of policy of transferring money to Ramallah

Carrie Keller-Lynn is a former political and legal correspondent for The Times of Israel

Finance Minister Bezalel Smotrich at a press conference at the Finance Ministry, in Jerusalem on October 19, 2023. (Noam Revkin Fenton/Flash90)
Finance Minister Bezalel Smotrich at a press conference at the Finance Ministry, in Jerusalem on October 19, 2023. (Noam Revkin Fenton/Flash90)

Finance Minister Bezalel Smotrich said Monday he had instructed the ministry to halt the transfer of funds to the Palestinian Authority and is urging the cabinet to reevaluate its policy on such funds, in light of what Smotrich characterizes as PA “support” for Hamas’s October 7 terror onslaught.

The funds are part of customs duties Israel collects on behalf of the PA. Israel has made such deductions in the past, following 2018 legislation that cites the PA’s payment of stipends to terrorists and their families. But it only partially upholds the policy, as officials are keenly aware that the PA is dangerously close to financial collapse.

Smotrich has frequently announced cuts to the transfers but has not offered clear figures on the amounts cut. It was not clear whether the far-right minister’s move had been coordinated with Netanyahu beforehand.

“I would like to inform you that I have instructed the Finance Ministry to stop the transfer of payments this month,” Smotrich wrote to Prime Minister Benjamin Netanyahu.

The finance minister also requested that the cabinet discuss Israel’s policy of transferring funds collected on behalf of the Palestinian Authority — as set out by the Oslo Accords — in light of “senior PA officials’ support for the horrific massacres of the Nazi terrorist organization Hamas.”

He accompanied his request with a list of 12 inflammatory statements made since Hamas brutally murdered 1,400 people, mostly civilians, and kidnapped over 240 during its rampage across southern communities on October 7. Israel has responded with intensive strikes on Gaza and a gradually expanding ground operation, declaring its intention to eradicate the terror group that rules the Strip.

Smotrich’s list includes a statement that appeared on the PA’s official broadcaster Palestine TV on the day of the massacre saying, “Today Gaza laid a blow the occupation won’t forget… today we awoke united.”

File: PA Prime Minister Mohammad Shtayyeh visits in the West Bank town of Huwara, near Nablus, March 1, 2023. (Nasser Ishtayeh/Flash90)

In another comment cited on October 8, PA Prime Minister Mohammad Shtayyeh refused to condemn the devastating onslaught, adding that “Israel is to blame for the situation.”

“The PA has once again proven the fact, about which we have been raising our voices for years, that it is a terror-supporting organization,” Smotrich wrote in the letter.

“Therefore, beyond the connection of these funds to the Gaza Strip and its residents, these funds are used for activities against the State of Israel and its citizens,” he added. “It is inconceivable that in this reality, we will continue to transfer these funds as if nothing has happened.”

Last week, the Haya Washington news site reported that Abbas at an emergency meeting of Palestinian factions had ordered Fatah and PLO members to cease commenting on the Gaza war.

The directive came after an interview senior Fatah official Abbas Zaki gave in which he thanked the armed wings of Hamas and the Palestinian Islamic Jihad for the October 7 onslaught, saying that they “know how to obtain the lifting of the blockade [on Gaza] and the withdrawal of the occupation from the West Bank.”

Abbas dressed down Zaki at that meeting for his comments, Haya Washington reported.

The government has been careful not to carry out harsh penalties against the PA, over fear that its collapse would create chaos and a power vacuum in the West Bank and serve as an opportunity for terror groups to seize control, similar to the situation in Gaza where Hamas violently ejected the PA in 2007.

Despite acrimonious relations, Israel also continues to cooperate with Ramallah on security matters, cooperation defense officials say has helped prevent terror. The Shin Bet, Washington and the EU have all been reported to be warning Israel that the West Bank is at boiling point.

The PA has increasingly lost control over the northern West Bank, empowering terror groups, and spurring Israeli forces to carry out regular operations in the area.

In August, the security cabinet considered measures to prop up the PA amid fears of its collapse, including revoking a decision to redirect the tax revenue Israel collects for the PA to families of Israeli terror victims, but delayed making a final decision.

In July, the security cabinet voted in favor of a series of steps to bolster the PA, including the approval of a new industrial zone in Tarqumiyah, near the southern West Bank city of Hebron, a move long supported by Israeli security officials, and the extension of hours at the Allenby border crossing with Jordan.

Jacob Magid and Times of Israel staff contributed to this report.

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