Israel can legally withhold tax revenues from the Palestinian Authority to offset funds it pays Palestinian terrorists and their families, legal experts from the Justice and Defense ministries told the Knesset.“We don’t see any legal impediment,” Justice Ministry attorney Anat Assif told the Foreign Affairs and Defense Committee, which last week debated a bill that would prohibit the passage of such fees.The legislation authored by MK Elazar Stern (Yesh Atid) is being prepared for its second and third readings, after which it would be passed into law.Prime Minister Benjamin Netanyahu has spoken about the importance of stopping such funding, and the security cabinet last summer agreed to halt the payments. In practice, however, the money is still being transferred, according to Stern’s office.Israel collects some NIS 700 million in tax fees annually for the PA , of which NIS 100m. is set aside for offsets toward electricity, water and other debts.US President Donald Trump has demanded that the PA stop making these payments as part of the his administration’s efforts to renew the Israeli-Palestinian peace process. There is a bill pending before both the US House and Senate — the Taylor Force Act — that would require the US to freeze its funding for the PA unless the Authority stops paying salaries to terrorists and their families.The legislation was named for Taylor Force, a 28-year-old US Army veteran and graduate student who was killed in a Palestinian terrorist attack while visiting Jaffa in March 2016. Neither the House or the Senate have scheduled a vote on the legislation. Israeli security experts are divided on the measure, with opponents fearing that the loss of funds as a result of the Taylor Force Act would destabilize the Palestinian Authority at the precise moment donor funding is dropping.Meir Indor, who heads the Almagor Terror Victims Association, told the Foreign Affairs and Defense Committee on Wednesday that passing the Israeli bill would send a strong message of support to the US politicians who are trying to pass the Taylor Force Act.FADC chairman Avi Dichter, who is a former director of the Israel Security Agency (Shin Bet), also favors the bill.It clarifies that Israel “won’t continue to be indifferent to the PA , which with one hand is working on peace with Israel while with the other hand is sanctifying the terrorists who harm us.”A Defense Ministry official told the Knesset panel the government also was working on legislation with regard to halting terrorist payments, but had no timetable for when the legislation would be drafted.Attorney Dudi Kopel of the Finance Ministry’s legal bureau, however, said he believed legislation of this kind could be problematic, including under international law.Article 16 of the 1994 Gaza-Jericho Agreement gives Israel the ability to withhold funds to offset debts, but it cannot do so because it disagrees with how the PA used the funds, said Kopel.Assif disagreed, saying the bill’s language used the word “offset,” which places it within the framework of Israel’s practice of withholding tax fees it collects for the Palestinian Authority to repay utility debts such as electricity. The Supreme Court, in the past, has left this step to the government’s discretion, particularly because the issue is tied to the political and diplomatic sphere, Assif added.Attorney Sara Weiss-Maudi, of the Foreign Ministry’s legal department concurred.The same 1994 agreement also bound both sides not to support terrorism, Weiss-Maudi said, adding that refusing to transfer funds that go to terrorists and their families falls within the bounds of that agreement.Attorney Gal Cohen from the Defense Ministry added that many aspects of the bill are already covered by existing legislation, such as the Anti-Terrorism Law, which allows the government to seize funds involved in terrorism.The MKs also heard from Morris Hirsch of the right-wing NGO Palestinian Media Watch who said he had personal experience with the issue as part of his work as the former head of the IDF’s prosecutor’s office in Judea and Samaria.He explained that the PA pays salaries to all detainees and security prisoners, including those involved in terrorism, on a sliding scale. If they have been incarcerated for more than five years, the payment is for life, he said.Payments are not made to Palestinian prisoners in Israeli jails for criminal, activity, he added.Hirsch stated that the payments are a clear violation of past international agreements to which the PA is a signatory and also is against UN Security Council resolutions, including Resolution 2334, which calls for a halt to terrorist activity.He estimated that more than 1,700 Israeli civilians had been killed in terrorist attacks in the last 30 years, not including soldiers and police officers.According to background information given to the Foreign Affairs and Defense Committee on the bill, the PA spends $300 million annually to pay salaries for terrorists and their families.