Jerusalem says it will release tax funds to Palestinians

By REUTERS
May 16, 2011 01:50

Steinitz describes two-week freeze of cash transfer as "yellow card," warns transfers will be stopped if unity government formed with Hamas.

1 minute read.



Finance Minister Yuval Steinitz

311_Yuval Steinitz. (photo credit: Tamar Matsafi)

Israel agreed on Sunday to release millions of dollars in suspended tax transfers to the Palestinian Authority after receiving assurances the money will not fall into the hands of the Hamas.

Earlier this month, Jerusalem blocked the routine handover of about NIS 300 million ($88 million) in customs and other levies it collects on behalf of the Palestinians after PA President Mahmoud Abbas struck a unity deal with his Hamas rivals.

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Finance Minister Yuval Steinitz said at the time he would only allow the transfer after receiving guarantees the money would not reach Hamas, whose charter calls for Israel's destruction.

On Sunday, Steinitz approved the resumption of the transfers, saying in a statement that the government "received suitable clarifications" that the money will not reach Hamas or be used to fund "terror activity."

He described the two-week freeze as a "yellow card" to the PA, and warned that if it eventually formed a unity government with Hamas, or if it started funding terrorist activity, Israel would again block the transfers.

Salam Fayyad, prime minister in Abbas's government, had sought international intervention to prevent the Israeli measure.

The PA is also heavily dependent on aid from donors including the United States, which has said its future assistance will depend on the shape of a new Palestinian government expected to be formed under the unity agreement.

The tax transfers provide the PA with $1 billion to $1.4 billion annually. Palestinian officials said they would not be able to meet their commitments, including paying salaries, without the funds.


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