Security cabinet mulls penalizing Palestinian Authority for statehood moves
Decision pushed off as defense minister, attorney general ask for more time to study proposals; Smotrich said to agree to release some tax revenues if settlements boosted
The security cabinet on Sunday discussed potential measures to strengthen settlement in the West Bank, in part as a response to Spain, Ireland, and Norway recognizing a Palestinian state last month.
The measures would also be a reaction to the Palestinian Authority’s hostile moves against Israel in international forums, the Prime Minister’s Office said in a statement.
However, Defense Minister Yoav Gallant and Attorney General Gali Baharav-Miara asked for time to comment further on some of the proposals in the coming days. The Shin Bet internal security service and the Israel Defense Forces both oppose any steps that may lead to the collapse of the Palestinian Authority, according to Hebrew media reports.
Prime Minister Benjamin Netanyahu ordered all the proposals to be brought for a vote at the next meeting of the full cabinet, scheduled for Sunday.
The ongoing war between Israel and Palestinian terror group Hamas in the Gaza Strip has ratcheted up the friction between Israel and the West Bank-based PA.
On October 7, Hamas led a massive cross-border attack on Israel that killed 1,200 people and saw 251 people taken hostage to Gaza.
Israel responded with a military campaign to destroy Hamas, topple its Gaza regime, and free the hostages.
In addition to using the destruction from the war and the casualty figures in Gaza as a springboard for a renewed push for Palestinian statehood, the PA has also taken Israel to the International Court of Justice and backed the International Criminal Court in seeking war crimes arrest warrants against Israeli leaders.
The intended punitive measures come as Finance Minister Bezalel Smotrich is slated to release hundreds of millions of dollars in tax revenues he’s been withholding from the PA.
Smotrich and Netanyahu have an understanding that if steps are made to advance settlement construction, he will release the cash to the PA, the Kan public broadcaster reported. Smotrich, who also holds a ministerial position in the Defense Ministry giving him authority over civilian issues in the West Bank, has been pushing to legalize dozens of illegal settlement outposts.
In addition, Smotrich is seeking to convene a committee in charge of settlement construction in order to approve thousands of housing units in settlements. He also intends to plan construction for Palestinians in West Bank areas under full Israeli control, known as Area C, although in a manner that won’t interfere with settlers’ strategic goals in those regions, the Ynet news site reported. Several preparatory meetings have been held recently, the report said.
Kan assessed that the cabinet is expected to eventually decide on sanctions against the PA that will pinch it but not cause its downfall.
Protesting the PA’s policy of making payments to terrorists and their families, Smotrich said last week that he had redirected $35 million in PA tax revenues to families of terror victims, a move condemned by the United States. Smotrich has also accused the PA of “support” for Hamas’s October 7 terror onslaught.
Smotrich initially froze the tax revenue transfers to the PA after the October 7 onslaught, The far-right minister later agreed to send the money via Norway, which transferred it to the PA.
Following Norway’s announcement in May that it — along with Ireland and Spain — would recognize Palestinian statehood, Smotrich again froze the funds, in what he called an act of “historic justice” given the PA’s financial support for families of Palestinians who had attacked Israelis.
The US and other Israeli allies have expressed concern that such a move would jeopardize the already-beleaguered PA’s ability to pay thousands of salaries, further stoking tensions in the West Bank.
Last week the G7 group of industrial nations, warning Israel against harming the PA, said, “Actions that weaken the Palestinian Authority must stop, including the withholding of clearance revenues by the Israeli Government. Maintaining economic stability in the West Bank is critical for regional security.”
In addition, Smotrich has told Netanyahu he would not extend indemnity to banks that transfer the funds from the end of June.
Israel’s Bank Hapoalim and Israel Discount Bank need protection, expiring on July 1, to avoid sanctions for dealing with Palestinian lenders.
If the waiver is canceled, Israeli firms will not be able to receive money from Palestinian banks or deposit Palestinian checks, impacting business ties. As part of the agreement he has with Netanyahu on measures against the PA in return for boosting settlements, Smotrich will extend the waiver, according to Hebrew media reports.
Agencies contributed to this report.
