G7 ministers rap Israel for expanding settlements, withholding PA funds
Top diplomats say economic stability in West Bank needed to prevent outbreak of violence, after Smotrich only partially released Palestinian tax revenues last month
ROME, Italy — Foreign ministers from the Group of Seven (G7) major democracies on Thursday denounced Israel’s move to expand its settlements in the West Bank, saying it was “counterproductive to the cause of peace.”
Israel announced last month that it was going to legalize five outposts in the West Bank, establish three new settlements, and seize huge swathes of land where Palestinians seek to create an independent state.
The G7 — which includes the United States, Britain, Canada, Japan, France, Germany, and Italy — condemned the move and urged Israel to reverse its decision. “We reaffirm our commitment to lasting and sustainable peace… on the basis of the two-state solution,” the statement said.
The G7 foreign ministers also called on Israel to release all remaining withheld tax revenues to the Palestinian Authority, saying maintaining economic stability in the West Bank was “critical for regional security.”
The security cabinet approved the legalization of Evyatar in the northern West Bank, Sde Efraim, and Givat Asaf in the central West Bank, and Heletz and Adorayim in the south of the territory, Finance Minister Bezalel Smotrich’s office said last month, adding that the cabinet had also approved advancing plans for thousands of new settlement homes in the West Bank.
In exchange, Smotrich agreed to extend indemnity to Israeli banks working with Palestinian ones in the West Bank for an additional four months and agreed to partially release three months’ worth of tax revenues that Israel collects on the PA’s behalf, which did not include a significant portion that the PA uses to pay for services and employees in Gaza. Israel claims those funds would end up in the hands of Hamas if paid.
Israel also deducts tens of millions of dollars each month to account for the money that the PA pays to terror convicts and the families of slain attackers. The PA is in the final stages of reforming this policy, officials told The Times of Israel in March.
Smotrich had refused to release the Palestinian tax revenues since April, bringing the authority to the brink of collapse, despite repeated warnings by Israel’s security establishment. The tax revenues account for some 70 percent of the PA’s annual income.
US President Joe Biden’s administration fears the collapse of the PA would lead to chaos in the West Bank that would be exploited by Hamas and Palestinian Islamic Jihad cells to open a new front to the war in Gaza, a US official told The Times of Israel last month, adding that the concerns are shared by the Israeli security establishment.
Already then, the official indicated that the quid pro quo would not fully satisfy the administration, warning that the sides are liable to find themselves in the same situation a month or two down the line “if and when [Smotrich] decides to hold up the funds again.”
