Israel talks steps to help West Bank economy in covert meeting with PA officials

Representatives convene in Tel Aviv to discuss easing tensions ahead of Ramadan; Abbas meets US top envoy Blinken, said planning summit with Hamas leaders in Qatar

Jacob Magid is The Times of Israel's US bureau chief

Palestinian shops are closed during a general strike in solidarity with Gaza at the commercial center of the West Bank city of Ramallah, December 11, 2023. Arabic reads 'A new dawn in the life of the Arab nation.' (Nasser Nasser/AP)
Palestinian shops are closed during a general strike in solidarity with Gaza at the commercial center of the West Bank city of Ramallah, December 11, 2023. Arabic reads 'A new dawn in the life of the Arab nation.' (Nasser Nasser/AP)

Senior Israeli security officials held a covert meeting with their counterparts from the Palestinian Authority in Tel Aviv this week to discuss efforts to calm tensions in the West Bank ahead of Ramadan, which begins in a month, an Israeli official and a senior diplomat familiar with the matter told The Times of Israel.

Attending the sit-down were National Security Council chairman Tzachi Hanegbi, Shin Bet chief Ronen Bar and the Coordinator of Government Activities in the Territories Ghassan Alian on the Israeli side and intel chief Majed Faraj and Civil Affairs Minister Hussein al-Sheikh from the PA.

The sides discussed measures that Israel can take to help address Ramallah’s ongoing economic crisis, intensified by Jerusalem withholding hundreds of millions of dollars in tax revenues; its ban on the return of roughly 150,000 West Bank Palestinian workers to jobs in Israel and settlements since the October 7 terror onslaught; its wartime ban on Arab Israelis entering Palestinian cities where many of them shop; and the installation of numerous additional checkpoints throughout the West Bank, which further limit movement and economic activity.

The Israeli officials told their PA counterparts that they would take several steps to address the situation, including reducing the number of checkpoints, reducing the number of arrest raids, allowing a subset of several thousand workers above the age of 45 to return to their jobs in Israel, and reopening several Palestinian cities to Arab Israelis, the two sources told The Times of Israel.

The sources said the Israeli security officials expressed optimism that the pledged measures would be approved by the government, though they are likely to face pushback from hardline members who have long equated the PA to the Hamas terror group.

As for the still unresolved tax revenue issue, the senior diplomat said the Israeli security officials indicated that Jerusalem would be willing to offer more flexibility on the matter.

Israel has been withholding NIS 275 million ($75 million) in tax revenues that it collects on Ramallah’s behalf. The figure amounts to the sum that the PA typically uses to pay services and employees in Gaza. The Israeli cabinet voted in November to withhold the Gaza portion from the monthly transfer saying, the funds could be funneled to Hamas.

National Security Adviser Tzachi Hanegbi speaks to reporters at the Israel Defense Forces’ Tel Aviv headquarters, October 14, 2023. (Avshalom Sassoni/Flash 90)

The PA held talks with the United Arab Emirates and Norway about Abu Dhabi or Oslo offering Ramallah a monthly loan to compensate for the withheld funds, a senior Western diplomat told The Times of Israel last month. But Israel blocked the PA from advancing with the loan, threatening to withhold the entirety of the tax revenues, which make up the vast majority of the PA’s budget, the diplomat said.

While the Gaza portion of revenues typically makes up $75 million or 25 percent of the monthly transfer, it has been far lower since the outbreak of the war, as the enclave’s economy ground to a halt.

Troops operating in the Gaza Strip in a photo released by the military for publication on February 8, 2024 (Israel Defense Forces)

The Israeli officials at the Tel Aviv meeting indicated that Jerusalem would be willing to lower the amount of the Gaza revenues it would withhold each month, the diplomat said.

The PA would still be barred from using the tax revenues to pay for services in Gaza. To pay for Gaza services and employees in the meantime, the PA will use the smaller amount of tax revenues it collects independently in the West Bank, the diplomat said.

The US has blasted Israel’s withholding of the funds, highlighting that they belong to Ramallah.

Israel approved a framework last month under which the Gaza portion will be sent to Norway, which will hold onto the funds until far-right Finance Minister Bezalel Smotrich authorizes their funneling to the PA. Oslo hasn’t formally accepted the proposal.

Washington backed the framework adopted by the cabinet and urged the PA to accept it, even though Ramallah warned that it gave too much authority to Smotrich, who has called for dissolving the PA entirely.

US Secretary of State Antony Blinken (left) and Palestinian President Mahmoud Abbas shake hands during their meeting in the West Bank town of Ramallah, February 7, 2024. (Mark Schiefelbein/AP)

Meanwhile, US Secretary of State Antony Blinken “discussed the benefits of revitalizing the Palestinian Authority” during his meeting Wednesday with PA President Mahmoud Abbas in Ramallah, the State Department said.

Washington has pushed for major PA reforms for it to be able to return to governing Gaza after the war ends.

Blinken also reiterated US support for more humanitarian aid going to Gaza, a US readout said, amid panic in UN Palestinian refugee agency UNRWA over the decisions by the US and over a dozen other countries to suspend funding due to allegations that 12 staffers participated in the October 7 terror onslaught.

The US has said it will send its funding to other aid agencies if need be, but UNRWA officials warn that it is the only organization currently equipped to distribute aid in Gaza.

“Blinken reiterated the United States’ support for the establishment of an independent Palestinian state as the best pathway to enduring peace and security for Palestinians and Israelis alike,” the US readout added.

The American top diplomat was on his seventh visit to Israel since the start of the war.

In the meeting, Abbas pressed for US recognition of a Palestinian state encompassing the West Bank, East Jerusalem, and Gaza, and for full UN membership, according to the Palestinian news agency Wafa. He stressed that peace and security can only be achieved through a two-state solution.

Abbas also expressed his “disappointment” at an entry ban into the US approved last week by the House of Representatives against members of the Palestine Liberation Organization (PLO), as well as Hamas and the Palestinian Islamic Jihad terror groups, saying that the measure would “affect the American role” in shaping the politics of the region. The bill is yet to be approved by the Senate.

PA President Mahmoud Abbas (left), Turkish President Recep Tayyip Erdogan (center) and Hamas chief Ismail Haniyeh meeting in Ankara, July 26, 2023. (Turkish Presidency)

The PA leader further called to increase efforts to halt the “Israeli aggression” and the displacement of the Palestinian people, both in Gaza and in the West Bank, and to put an end to settler attacks against Palestinians, particularly in the Jordan Valley.

Abbas also urged Blinken to increase pressure on Israel to release the tax funds earmarked for Ramallah.

Channel 12 reported Wednesday that Abbas is planning to visit Qatar in the coming days with the aim of meeting with Hamas leaders, including political leader Ismail Haniyeh, based in the Arab state’s capital, Doha. Citing Palestinian sources, the network said two key subjects will be on the agenda: potentially forming a unity government with Hamas and the fate of Gaza when the war concludes.

According to the report, Abbas sees the PA as the legitimate regime to rule over the Gaza Strip.

Hamas seized control from the PA in a bloody 2007 coup and has been the de facto power in the Palestinian enclave ever since. The PA, which is dominated by Abbas’s Fatah party, has remained at odds with Hamas ever since.

Israel has stressed that removing Hamas from power in Gaza is a prime goal of the war but has been vague about what regime it envisions there after the conflict concludes, while rejecting the PA due to what Jerusalem says is ongoing incitement against Israel.

The last time Abbas met with Hamas leaders was in Turkey, six months ago.

Most Popular
read more: