The Essence
U.S. President Joe Biden and Israeli Prime Minister Benjamin Netanyahu recently had a “frustrating” call regarding Israel’s withholding of Palestinian tax revenues, amidst an intense backdrop of conflict with Hamas.
Why It Matters
The withheld funds, which are vital for the Palestinian Authority’s (PA) operations, are adding to the strain in U.S.-Israel relations and complicating efforts to manage regional stability.
The Conflict
Following a deadly Hamas attack on October 7, which claimed 1,200 lives in southern Israel, the Israeli security cabinet moved to withhold a substantial portion of tax revenue owed to the PA. This decision, part of a policy to disconnect financially from Gaza, poses risks to the PA’s survival and has been contested by U.S. officials.
Political Impasse
The tension rides on Israel’s stipulation that it will not release funds intended for the Gaza Strip, fearing they may benefit Hamas. The PA, in turn, rejected any partial transfer of tax funds, threatening its own financial collapse—a scenario that could place civil responsibility for millions of Palestinians onto Israel.
Attempts at Resolution
A suggestion to transfer the withheld tax revenue to Norway for safekeeping—pending a satisfactory arrangement to Israel’s security concerns—was discussed but met with hesitation from Netanyahu. President Biden urged Netanyahu to consider the arrangement, which was initially accepted by the PA, but the conversation reportedly ended with a firm directive from Biden to resolve the issue.
Differing Perspectives
While one U.S. official described the call as particularly difficult, another suggested progress is being made towards a resolution. The White House characterized the conversation as “good and productive.”
Future Implications
The resolution of this dispute is crucial for maintaining the precarious balance of peace and security in the region, with implications for Israeli, Palestinian, and broader international dynamics.
This story was first published on timesofisrael.com.