Under pressure, Israel releases Palestinian tax funds

Israel yesterday said it would be releasing to the Palestinian Authority tax funds it had been withholding as punishment, as diplomatic pressures on the Jewish state were coming to a head.

The move could help to preempt imminent Palestinian diplomatic measures against the Jewish state, as well as disarm tensions with the United States and international community after a polarising Israeli election campaign.

Tap here to add The Daily Star as a trusted source

Prime Minister Benjamin Netanyahu's office said revenues accumulated over three months, frozen by Israel since January in retaliation for a Palestinian move to join the International Criminal Court (ICC), would be transferred after normal deductions for services.

But it did not say whether Israel would resume the normal monthly payment of around $127 million in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports.

The Israeli decision will help to sustain the Palestinian Authority, facing financial collapse without tax revenues that constitute some two-thirds of its annual budget, excluding foreign aid.

On Wednesday, the Palestinians will formally become members of the ICC and can proceed with legal action there against Israeli officials.

The White House recently said it may withdraw crucial diplomatic cover for Israel at the UN Security Council as it reevaluates its position. Such a move could prove problematic for Israel if the Palestinians resubmit a draft resolution setting an end date for the Israeli occupation.

Meanwhile, Israel is facing a new French-sponsored draft resolution that would seek to revive peace talks with the Palestinians.

Foreign Minister Laurent Fabius said Friday that discussions on a text would start "in the coming days."

In December, the Security Council rejected a resolution that would have set a deadline for reaching a final peace deal and pave the way to the creation of a Palestinian state.

Fabius told reporters that "obviously the two parties must discuss, but the discussion must be backed by an international effort."

Israel has long maintained that direct talks with the Palestinians are the best framework for advancing peace talks and has bristled at UN involvement to set a timeframe for a deal.