The head of the Shin Bet security service, Nadav Argaman, met recently with Palestinian Authority President Mahmoud Abbas in an attempt to persuade him to agree to accept tax money collected by Israel on the PA’s behalf, according to a Saturday report by Channel 12 news.
Abbas has refused to accept the funds because Israel was withhelding money to match the sums the PA pays to the families of terrorists.
It wasn’t immediately clear exactly when the meeting took place.
The Shin Bet refused to comment on the report.
Israel announced in February that it would withhold $138 million in monthly funds to the PA — to offset the PA’s payments to Palestinians jailed by Israel for terrorism and violence, and to the families of dead terrorists.
Israel says the PA payments to terrorists and their families encourage further violence and offer a direct incentive to commit attacks. The Palestinians describe them as social welfare to families affected by conflict.
The Palestinians have protested the unilateral Israeli cutback, and have been refusing to receive any of the taxes Israel gathers for them on a monthly basis as long as the Jewish state does not transfer the full amount. To steady its finances, the authority has enacted austerity measures.
The taxes Israel collects and transfers to the PA make up hundreds of millions of shekels, more than half of its monthly budget.
Israel has several times reportedly tried to transfer $182 million to the PA, but the transactions were rejected. Jerusalem is concerned that if the PA collapses, it will destabilize the West Bank.
In April, the Arab League pledged $100 million per month to the Palestinian Authority to make up for funds withheld by Israel.
In early 2018, the US cut its contributions to UNRWA, the controversial UN agency for Palestinian refugees and their descendants, from $360 million to $60 million. In 2019, US contributions are zero.
PA Finance Minister Shukri Bishara has announced that Ramallah undertook a series of austerity measures to mitigate against the impact of the lack of funds on government operations, including the slashing of public employee salaries.
Palestinian Authority Prime Minister Mohammad Shtayyeh recently warned that the PA would collapse by July or August if the financial standoff with Israel is not resolved.
Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon in April reportedly discussed emergency plans should the PA’s financial system collapse. The two met to discuss what plans to put in place and what possible moves would keep the Palestinians solvent, amid fears that financial woes could cripple the Palestinian economy and destabilize the West Bank.
The World Bank warned in April of an economic crisis, if the issue is not resolved.