Prime Minister Binyamin Netanyahu decided on Tuesday evening to transfer to the Palestinian Authority some NIS 400 million Israel collected last month in tax revenue for the PA, but withheld in response to the Palestinian statehood upgrade move at the UN in November.

A source in Netanyahu’s bureau said the decision was for a one-time transfer and was due to the economic hardships facing the PA.

Netanyahu met on Monday in Jerusalem with Quartet envoy Tony Blair, where this issue was raised. The US has also raised the issue with Jerusalem.

Government sources rejected speculation that the move was a confidence-building measure toward the PA taken in the wake of the recent Israeli election to try and create a more positive atmosphere.

The sources also denied the move was related to the coalition-building steps and the likelihood that Yesh Atid, which has called for promoting talks with the Palestinians, is to be a key member of the new coalition.

Further transfers to the PA of the tax revenues would be evaluated on a month-bymonth basis, sources said.

Israel responded to the PA move at the United Nations General Assembly in November by announcing that it would withhold the transfer of funds, as well as build 3,000 housing units beyond the Green Line, and push forward development plans for E1 in Ma’aleh Adumim, east of Jerusalem.

Netanyahu’s decision rolls back an announcement former foreign minister Avigdor Liberman made on December 10 that Israel would not transfer a shekel of tax revenue to the PA for the next four months. Liberman said the PA owed Israel NIS 6 billion, which included NIS 900m. that the PA owed to Israel for electric and water bills, and NIS 700m. that was owed for funds advanced in the summer to pay PA salaries.

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