US denies deal with Smotrich over PA banking approval

After Finance Minister Bezalel Smotrich declared that he had succeeded in preventing a US-backed UN Security Council Resolution recognizing a Palestinian state, a Biden administration official tells The Times of Israel that no such initiative was in the cards.

Smotrich made the declaration after the security cabinet voted to grant a one-year extension allowing Israeli banks to coordinate with Palestinian ones.

The far-right minister suggested that he managed to leverage Israel’s extension of the corresponding banking deal critical to the Palestinian Authority’s survival to ensure that the US would not allow the Security Council to recognize a Palestinian state.

The Biden aide says the US told Israel that this idea was never in the cards — apparently what had convinced Smotrich and other ministers to grant a one-year extension to the banking deal long sought by Washington.

The Biden administration has repeatedly come out against efforts to unilaterally recognize a Palestinian state, asserting that the outcome should be the culmination of negotiations between the parties.

But some in Jerusalem feared the step would be reconsidered before US President Joe Biden wraps up his term in office.

The US official tells The Times of Israel that the Biden administration is still considering other steps to boost prospects for a two-state solution before the end of the lame-duck period.