ISRAEL HAS suspended the transfer of tax revenues to the Palestinian Authority (PA) to protest the unity agreement between rival Palestinian factions Fatah and Hamas which is due to be signed this week in the Egyptian capital Cairo.
Israeli finance minister Yuval Steinitz announced that the transfer of €60 million to the Palestinians this week was being put on hold until Israel received assurances that the money will not reach Hamas, which controls Gaza.
“The burden of proof is on the Palestinians,” Mr Steinitz told Israel radio, “that the money we pass on, even money that is theirs, will not go to the purchase of rockets that will later fall on Sderot, Ashkelon or Ashdod.”
The Palestinian leadership reacted angrily and vowed that the Israeli measure will not stop the reconciliation which came after four years of bitter rivalry between the factions.
Palestinian prime minister Salam Fayyad said the PA was “in contact with all international influential forces and parties to stop Israel from taking these measures.” Palestinian negotiator Saeb Erekat termed the Israeli move “financial piracy”, and accused Israel of “starting a war” even before a new Palestinian government had been formed.
Israel collects some tax and customs fees for the Palestinians under the peace agreements of the 1990s. The cash-strapped PA relies heavily on the Israeli cash transfers, which provide it with more than €650 million annually – two-thirds of its budget.
This is not the first time Israel has suspended the transfer of tax revenues over concerns that the cash may help fund terror activity.
Parallel to the financial sanctions, Israel has launched a diplomatic drive to persuade the international community to reject Palestinian reconciliation until Hamas accepts the three conditions set down by the quartet, comprised of the US, European Union, Russia and the United Nations: recognition of Israel; renunciation of violence; and acceptance of agreements signed between Israel and the PLO.
Mr Netanyahu said the Fatah-Hamas pact should concern all who aspire to see peace between Israel and the Palestinians.