Israel releases Palestinian funds

01/07/2007| IslamWeb

Israel has begun releasing tens of millions of dollars in tax funds that it has withheld from the Palestinian Authority during a 17-month boycott.

The first transfer was made on Sunday but the initial amount was unclear.

The move follows the dissolution of a Palestinian national unity government that was led by the Hamas group, which refuses to recognize Israel.

PA President Mahmoud Abbas dissolved the government after Hamas routed his Fatah movement in Gaza.

Israel has pledged to support the emergency cabinet of Mr Abbas, operating from the West Bank, in opposition to Hamas, which controls Gaza.

Israel has also stepped up air strikes on Gaza. Three strikes on Saturday killed seven Palestinians, including a senior member of the Islamic Jihad militant group.

Six months

The exact amount of tax funding held by Israel since it froze transfers on 1 February last year is in dispute.

Palestinian officials say it is more than $700m while Israel puts the figure closer to $500m.

It says only $300-$400m can be transferred as a court order has frozen some money to cover Palestinian debts. The timeframe is about six months, an Israeli official said.

Israeli officials said the sum being released on Sunday was at least $50m, covering about a month's worth of revenues.

However, a Palestinian official told AFP news agency that the Palestinian finance ministry received $118m in the afternoon.

The freezing of the funds, coupled with a Western economic boycott, crippled the Palestinian Authority, depriving key workers of pay.

Mr Abbas's government says it will be able to make salary payments this week.

Hamas has labeled the money transfer "political blackmail", intended to divide Palestinians further.

Israel collects customs duties on behalf of the Palestinians and the tax funds make up about 50% of the authority's budget.

PHOTO CAPTION

President Mahmoud Abbas