The United States has denied accusations it is pressuring banks to stop dealing with the Palestinian Authority, whose relations with Washington have been plummeting.
Several Palestinian officials have accused the US of trying to force banks not to deal with transactions linked to the Palestinian Authority, which has limited self-rule in the West Bank.
“The United States has not requested that foreign donors restrict assistance to the Palestinians, nor has it requested that financial institutions cease transfers to Palestinian Authority (PA) bank accounts,” a US official told AFP late Monday.
“We are aware of media reports suggesting this has occurred. Those reports are incorrect,” he said.
PA Foreign Minister Riyad al-Malki has said on local radio that the US was using “all means to press Arab countries to stop financial support for our people.”
On Sunday, senior Palestinian official Hussein al-Sheikh charged that Washington was launching a “financial siege” on the PA. “Major international financial institutions and parties have begun to accede to an American request to impose a tight financial siege on the Palestinian Authority,” he told AFP.
“Washington has asked for financial aid given to the authority to be stopped, and it has also issued a circular to banks not to receive transfers for the authority’s accounts,” he said.
The claim came on the same day that Prime Minister Benjamin Netanyahu vowed to begin deducting PA payments to convicted terrorists and their families from tax transfers Israel hands the PA each month, and after massive cuts in US aid to the Palestinian in recent months.
Netanyahu told cabinet ministers that he would, in a week’s time, begin cutting funds to the PA over its payments to terrorists and their families.
The comments come amid pressure on Netanyahu to act after the arrest of a Palestinian man, Arafat Irfayia, 29, on Friday for the brutal murder of 19-year-old Ori Ansbacher in a southern Jerusalem wood a day earlier. The case has sparked outrage across the country, and the Shin Bet security service has indicated Irfayia had a nationalistic motive for the attack.
The government has refused to implement the power given to it by the law to freeze the fund transfers amid security officials’ fears it could destabilize the PA and lead to violence. But politicians have faced public pressure to crack down on the PA’s payments, which are viewed as incentivizing terror attacks.
A PA law legislated in 2004 says any Palestinian prisoner and his or her family are entitled to a variety of payments. The law defines a prisoner as “anyone who is sitting in the occupation’s prisons for participating in the struggle against the occupation” and calls such a person “part and parcel of the Palestinian Arab community’s fabric.”
Palestinian officials have argued payments to security prisoners seek to mitigate what they call an unfair Israeli military court system.
Relations between the US and the Palestinians have broken down since US President Donald Trump recognized Jerusalem as Israel’s capital in late 2017.
The Palestinians consider the eastern part of the city their capital and have boycotted the Trump administration since. In response the US has cut more than $500 million in annual aid to the Palestinians.
The cuts have worsened long-term financial shortfalls for the PA, which is heavily reliant on international aid.