Biden administration ‘frustrated’ over need to push Israel to extend banking deal with PA

US State Department spokesperson Matthew Miller expresses the Biden administration’s frustration that it took intensive negotiations with the Israeli government to convince Jerusalem to grant a one-year extension to the corresponding banking agreement, which grants indemnity for Israeli banks to conduct transactions with Palestinian ones.

“It’s incredibly frustrating that it took this long to get the government of Israel to extend this agreement for the year — that it now did something they should have just done through the regular course of business,” Miller says during a press briefing, arguing that failure to extend the deal would have risked collapsing the Palestinian economy, which manifestly would not have been in Israel’s interest, as it would have destabilized the West Bank.

Far-right Finance Minister Bezalel Smotrich has held off on extending the agreement, arguing in favor of collapsing the Palestinian Authority, as he seeks to annex large parts of the West Bank.

Days before the banking deal was set to expire, Smotrich said that he agreed to back a one-year extension, after securing commitments from the Biden administration that it would not allow the passage of a UN Security Council Resolution recognizing Palestinian statehood. US officials told The Times of Israel that such an idea would have gone against longstanding administration policy and that they had no problem offering such assurances, given that the idea was never in the cards.

Asked whether a UN Security Council resolution was ever part of the negotiations the US has had with Israel, Miller responds: “We will continue to look at every resolution that comes before the United Nations Security Council and judge whether voting yes, voting no, voting abstaining, is in the interest of the United States, and we will make our judgments based on that and nothing else.”