Israel agreed to extend banking deal with PA for US commitment to veto Palestinian state at UN — report

Israel agreed to extend a waiver allowing Israeli banks to correspond with Palestinian ones for another year in return for the US committing to veto any recognition of a Palestinian state at the UN, Channel 12 reports.

The report says the deal was negotiated by Strategic Affairs Minister Ron Dermer in the face of massive US pressure to extend the agreement amid fears that failure to do so would lead to the collapse of the Palestinian Authority.

Earlier, the security cabinet agreed to extend the deal by a year.

For the past two months, Finance Minister Bezalel Smotrich has only agreed to extend the corresponding banking agreement for one month at a time, adding a great deal of uncertainty regarding whether the far-right minister will act on his repeated calls to collapse the PA.

Ahead of the security cabinet vote, ministers were presented with the National Security Council’s position in favor of a one-year extension due to concerns that failure to do so would have major security and diplomatic repercussions.