The inner cabinet decided Wednesday to release $100 million in Palestinian tax revenue that Israel has been withholding since the beginning of the month. The decision applied to the funds meant to be transferred in October and November, Israel Radio reported.

Prime Minister Binyamin Netanyahu faced opposition from Foreign Minister Avigdor Lieberman, who has come out unequivocally against the move, saying Monday his Israel Beiteinu party would “do everything possible” to prevent the transfer of the funds. Lieberman made clear, however, that despite his objections, his party would not break up the coalition over the issue.

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Quartet envoy Tony Blair on Wednesday praised the government's " important decision" to release the hold on the tax revenues.

"This is Palestinian money which is critical to sustaining the PA and should be transferred on a regular and predictable basis in line with previous Israeli-Palestinian agreements. Withholding these funds only benefits those who oppose peace and Israeli-Palestinian cooperation," Blair said in a statement.

"I have discussed the importance of a smooth transfer of revenues with Prime Minister Netanyahu and other ministers in the Israeli government on many occasions, as have others in the international community, and have urged him repeatedly to transfer these funds without delay," he added.

Netanyahu told the Knesset Foreign Affairs and Defense Committee on Monday that he supported transferring the money now because the situation with the Palestinians had “calmed down,” and the Palestinian Authority has at least temporarily put a hold on seeking statehood recognition in various UN bodies.

The decision to freeze the money, which according to EU numbers makes up some 30 percent of the PA budget, was taken at the beginning of the month after UNESCO voted to accept the Palestinians as a full member. In addition to freezing the funds, Israel also decided to react to that move by accelerating the building of some 2,000 housing units in Jewish neighborhoods in east Jerusalem, as well as in Efrat and Ma’aleh Adumim.

According to government sources, Netanyahu believes that if the PA returns to its proactive efforts at the UN, Israel could once again freeze the funds. Under the terms of the Oslo agreements, Israel collects the tax money each month and transfers it to the PA. Netanyahu said in the Knesset that Israel ultimately doesn’t want to see the PA fail.

The prime minister has come under intensive international pressure over the past couple of weeks to transfer the money, with one argument being that the funds pay the salaries of the PA security apparatus, and it is in Israel’s interest for that apparatus to continue functioning.

In the past week, UN Secretary-General Ban Ki-moon, US Secretary of State Hillary Clinton, Blair and other world leaders called on Netanyahu to renew the transfers.

Israel froze the funds a number of times during the height of the Second Intifada as a way of placing pressure on the PA.

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