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Senior Israeli and PA officials meet, agree on transfer of critical tax revenue

Palestinian Authority will officially return to accepting monthly transfers of taxes that Israel collects on its behalf, which constitute over 60 percent of PA budget

Hussein al-Sheikh, a close confidant of Palestinian Authority President Mahmoud Abbas, speaking on Palestine TV, the official PA channel. (Screenshot: Palestine TV)
Hussein al-Sheikh, a close confidant of Palestinian Authority President Mahmoud Abbas, speaking on Palestine TV, the official PA channel. (Screenshot: Palestine TV)

Senior Israeli and Palestinian officials tasked with handling coordination between the two sides held their first public meeting Thursday since Ramallah severed ties in May, the Palestinian Authority official tasked with managing relations with Israel said in a statement.

“Today I held a meeting with the Israeli side. We emphasized that the bilateral agreements signed, which are based on international law, are what governs this relationship,” Hussein al-Sheikh said in a tweet

Al-Sheikh said the Palestinians had reached an agreement with Israel which will see the transfer of hundreds of millions of dollars in tax revenues that Israel collects on its behalf.

The PA cut off relations in protest of a since-shelved Israeli plan to annex parts of the West Bank.

Al-Sheikh announced that Ramallah was renewing its ties with Israel on Tuesday night, ending a six-month-long crisis that saw coordination between Israel and the Palestinians collapse and hundreds of thousands of Palestinian civil servants go without their salaries.

The shift came after the US presidential election was won by Democratic challenger Joe Biden, who Ramallah anticipates will prove more empathetic to their cause than President Donald Trump. The PA severed all dealings with the Trump administration three years ago, after he recognized Jerusalem as Israel’s capital and moved the US embassy there.

PA President Mahmoud Abbas heads a leadership meeting at his headquarters in the West Bank city of Ramallah, May 19, 2020. (Alaa Badarneh/Pool via AP)

Al-Sheikh said he had met with Israel’s military liaison to the Palestinians, Major-General Kamal Abu Rukun.

Abu Rukun’s office, the Coordinator of Government Activities in the Territories, declined to comment on the meeting on the record.

Palestinian officials are reportedly changing strategy following Biden’s victory, in an effort to reverse the harsh punitive measures the Trump administration applied to Ramallah.

“This, for us, is not just a window, it’s a gate through which we can re-establish our relationship with the United States,” Al-Sheikh told Palestine TV on Tuesday night.

Ramallah reportedly quietly returned its ambassadors to the United Arab Emirates and Bahrain recently, after having recalled them in protest of the countries’ decision to normalize ties with Israel.

It is also considering reforming its controversial policy of paying salaries to Palestinians convicted by Israel of security offenses and terrorism. The prisoner issue has long hampered the PA’s diplomatic efforts in Washington, and Israel has repeatedly invoked the terror funding to criticize Ramallah in international forums.

Relatives of Palestinians held in Israeli jails hold their portraits during a protest to mark “Prisoners Day” in the West Bank city of Ramallah, April 7, 2019.(AP Photo/Majdi Mohammed)

The PA announced in early June that it would refuse to accept the monthly transfer of over $100 million as part of ending coordination with Israel. The revenues constituted over 60 percent of Ramallah’s 2019 budget.

With the PA facing a massive fiscal crisis, hundreds of thousands of public-sector employees — some 15 to 20 percent of the PA’s economy, according to an assessment by the World Bank — did not receive full salaries for nearly five months.

While a report carried by the WAFA official news agency described the funds as “withheld,” Israeli officials have repeatedly said that they were willing to transfer the funds but the Palestinians refused to accept them.

A Palestinian Finance Ministry spokesperson confirmed to The Times of Israel that the Ministry had not yet received the tax revenues and that a new date to pay out the salaries of PA civil servants was yet to be set.

The Civil Affairs Commission did not respond to a request for comment as to when the funds would be transferred.

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