US hails government’s decision to extend Israel-PA bank ties deal by a year

The US hails the Israeli government’s decision to grant another year of indemnity to Israeli banks, allowing them to continue corresponding with their Palestinian counterparts.

The extension of the so-called corresponding banking agreement had become a top priority for the Biden administration in recent months, as far-right Finance Minister Bezalel Smotrich refusal to sign off on an extended lengthening of the deal risked collapsing the Palestinian Authority.

Smotrich said he agreed to back a one-year extension after securing commitments from the Biden administration that it wouldn’t 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.

“Economic stability in the West Bank is essential for Israeli and Palestinian security, and correspondent banking is a key pillar of that economic stability,” says a joint statement from the US State and Treasury Departments welcoming the one-year extension.

“The United States appreciates the ongoing engagement with the government of Israel and the Palestine Monetary Authority on this matter,” it adds.