Israeli Prime Minister Benjamin Netanyahu’s government struck a $120 million blow to the cash-strapped Palestinian Authority today and further undermined its territorial claims, announcing plans to move forward with a controversial settlement that would effectively divide the West Bank in two.
The moves came in response to the Palestinians’ successful bid last week to be recognized at the United Nations as a state. After Palestinian Authority (PA)President Mahmoud Abbas received a standing ovation for a speech in which he repeatedly referred to Israel’s “racist, colonial occupation,” Israeli Prime Minister Benjamin Netanyahu today characterized the Nov. 29 UN vote as an attack on Zionism and the state of Israel.
The Israeli moves caught many off-guard, including some dismayed government officials, and caused some to sound a funeral toll for the peace process.
As the custodian of Palestinian Authority tax revenues, Israel wields significant financial leverage over the PA thanks to an annex of the Oslo Accords known as the Paris Protocol.
The PA owes Israel roughly 800 million shekels ($210 million) in unpaid electricity bills and has yet to pay November salaries. It was counting on 460 million shekels ($120 million) in November tax revenues to meet payroll. But today Israel’s minister of Finance announced that rather than transfer the tax revenues to the PA, it would deduct that amount as a down payment on the PA’s overdue electricity bill.
While Israel had threatened to withhold tax revenues if the Palestinians pursued their UN bid, it also has expressed concern that the deep and chronic economic crisis in the West Bank could spark greater restlessness – and thus a potential threat to Israel’s security.
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