US says Palestinian banking waiver, unfrozen PA tax transfers good but not enough

The US says Finance Minister Bezalel Smotrich’s decision to temporarily extend Israel’s banking relationship with the Palestinians and to release some of the tax revenues withheld from the Palestinian Authority is welcome, but not enough.

State Department spokesperson Vedant Patel says both moves were insufficient amid continued concerns of the PA’s potential collapse, and also speaks out against moves to expand settlements okayed by Israel to gain the concessions from Smotrich.

Smotrich last week agreed to extend indemnity to Israeli banks working with Palestinian ones in the West Bank for an additional four months and agreed to partially release three months’ worth of tax revenues that Israel collects on the PA’s behalf.

The tax revenues did not include a significant portion that the PA uses to pay for services and employees in Gaza, which Israel claims will end up in the hands of Hamas. This portion makes up roughly 40 percent of the revenue.

The moves by Smotrich were taken in exchange for the security cabinet approving a series of sanctions against the PA over its support for efforts against Israel in the International Criminal Court and the International Court of Justice, along with decisions by three European countries to recognize the State of Palestine.

The cabinet also okayed the legalization of five wildcat outposts that were built largely on private Palestinian land along with next week’s advancement of plans for over 6,000 new settlement homes.

Asked about the quid pro quo agreement, Patel tells a press conference the US “welcome[s] reports that Israel will extend the corresponding banking relationship for four months… But our call is for Israel to extend corresponding banking for at least 12 months

As for the tax revenues, Patel stresses that “These are funds that belong to the Palestinian Authority” and calls on Israel to release the remainder of the funds. “We have made these concerns clear to our partners in Israel at the highest level and will continue to engage with them on that issue.”

The State Department spokesperson speaks out against the outpost approvals and new homes planned, saying they are “inconsistent with international law and something that only serves to weaken Israel’s security.”

“Unilateral actions like settlement expansion and legalization of outposts are detrimental to a two-state solution. We’ll continue to use the tools at our disposal to expose and promote accountability for those who threaten peace and stability in the region,” he says.