There has been considerable media coverage of the channeling of international donor funding to pay salaries of Palestinian terrorists serving sentences for acts of terrorism.This practice raises serious legal and moral questions, especially inasmuch as it clearly violates Palestinian commitments in the Oslo Accords not to finance or encourage terrorism. Channeling funds to pay terrorist salaries would also appear to run counter to international counter-terrorism conventions and resolutions of the UN Security Council as well as national legislation prohibiting the use of funds for those involved in terrorist activity.The funding comes from foreign governments (principally the US, UK, Denmark and other EU countries) to the Palestinian Authority (PA ) and the Palestine Liberation Organization (PLO ). While ostensibly the funding is intended to assist the Palestinian institutions in their day to day governance, in fact considerable amounts of these funds are used for the purpose of payment of salaries and other benefits to Palestinians imprisoned for acts of terrorism, and to their families.In light of criticism by the donor governments, emanating from the fact that donor funding of prisoners’ salaries and family benefits is perceived to be rewarding terrorism, efforts were made by the PA to conceal direct funding by transferring money to the PLO , which is the umbrella Palestinian representative body. The PLO , in turn, uses these funds for payment of salaries and benefits to the prisoners and their families.This situation is a clear violation both of the Oslo Accords between the PLO and Israel, witnessed by the US, EU and other international authorities, as well as a violation of international law and UN resolutions adopted specifically to counter terrorism funding.The Oslo Accords and their related documents, signed between the Palestinian leadership and Israel between 1993 and 1999, constitute the accepted and recognized framework that determines all aspects of the Israeli-Palestinian relationship.The PA is the subordinate governing body established by Israel and the PLO in the Oslo Accords for the purpose of administering the areas and implementing the powers and responsibilities transferred to it by Israel. It was established only for the purpose of administration and governance, and its responsibilities are limited solely to this sphere. It is prohibited from conducting foreign relations or signing agreements or doing anything that does not relate to the internal governance of the areas under its jurisdiction. As such, the PA is nothing more than a “creature of the PLO -Israel agreements.”In the Oslo Accords the PLO is formally committed to combat all forms of terrorism, violence and incitement. This commitment appears both in an exchange of letters between PLO chairman Yasser Arafat and prime minister Yitzhak Rabin, dated September 9, 1993, as well as in the various agreements signed between them, and specifically the 1995 Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip, signed at Washington DC.The Oslo Accords limit the use of funds donated by foreign governments to implementing arrangements for assistance to the PA in the fulfillment of its functions. Accordingly, transfer by the PLO of donor funding for payment of salaries to terrorists in prison runs solidly counter to PLO obligations vis-àvis Israel, the US, the EU and the other signatories who witnessed the agreements. By the same token, transfer of such donor funds by the PA as the subordinate, implementing authority constitutes no less a violation of the Palestinian obligations.In international law and practice, the issue of financing terrorism has consistently figured as a major and central component of international terrorism. Hence, a series of international and regional treaties and UN resolutions have been adopted over the years to prevent terrorism financing, especially inasmuch as it constitutes a form of encouragement and support, both moral and material, for terrorism.The 1994 UN Declaration on Measures to eliminate International Terrorism calls upon states to refrain from organizing, instigating, facilitating, encouraging, tolerating and financing terror activities.Similarly, the 1999 International Convention for the Suppression of the Financing of Terrorism criminalizes the provision of funding, directly or indirectly, for any use connected with terrorism.Regional counter-terrorism instruments obligating member states to act against the financing of terrorism include the 2002 Inter-American Convention against Terrorism, which contains a specific provisions detailing measures to prevent, combat and eradicate the financing of terrorism, seizure and confiscation of funds or other assets.The landmark, obligatory UN Security Council Resolution 1373, adopted following the 2001 World Trade Center attacks, recognized “the need for States to complement international cooperation by taking additional measures to prevent and suppress, in their territories through all lawful means, the financing and preparation of any acts of terrorism.” It obliged states to cooperate in combating international terror and criminalized all provision of funding for terrorist use, determined a freeze on and prohibition of transfer of funds and assets of persons who commit terrorist acts. Clearly the use of international funds for the purpose of paying the salaries and benefits of terrorists serving prison sentences for acts of terrorism is the very antithesis of any bona fide, positive international action to encourage peace and stability in the Middle East.It runs against the very spirit of the counter-terrorism policies of the very states making the contributions, as well as against their active involvement in the Israeli- Palestinian peace process.In light of the above, it is clear that the use of international funds for the purpose of paying the salaries and benefits of terrorists serving prison sentences for acts of terrorism is a violation both of the specific Palestinian obligations pursuant to the Oslo Accords and accepted norms encapsulated in international legal instruments, including the 1999 UN Convention for the suppression of the financing of terrorism and the 2001 UN Security Council resolution to combat international terrorism.The author served as the legal counsel of Israel’s foreign ministry and Israel’s ambassador to Canada. He was involved in the negotiation and drafting of peace treaties and other documents in the peace negotiation process.He presently serves as director of the Institute for Contemporary Affairs at the Jerusalem Center for Public Affairs.