Israel to withhold NIS 600 million from PA over its payments to terrorists’

The security cabinet voted to withhold over half a billion shekels from the Palestinian Authority on Sunday to offset funds that the PA paid to terrorists and their families in the past year.

The NIS 600 million ($176 million) that the government voted to freeze will come from tax funds that Israel collects on behalf of the PA.

According to Kan news, the NIS 600 million would be deducted in monthly installments over the next year.

In 2018, Israel passed a law requiring the government to withhold the equivalent amount of money that the PA is estimated to pay out to Palestinian terrorists and their families. Despite this being required by law, the security cabinet must nevertheless vote periodically to approve the move.

Though popular with Israelis, who oppose the PA’s system of so-called “pay to slay,” which incentivizes terrorism, this law is believed to be potentially destabilizing for the perennially cash-strapped Palestinian Authority. Israel has in the past offered loans to the Palestinians in order to keep the PA afloat and prevent its total breakdown.

Health Minister Nitzan Horowitz, of the dovish Meretz party, abstained from Sunday’s vote, according to Kan, which cited sources saying that he was opposed to the measure.

Prime Minister Yair Lapid (right) and alternate prime minister Naftali Bennett at a cabinet meeting at the Prime Minister’s Office in Jerusalem on July 31, 2022. (Marc Israel Sellem/POOL)

Israel has long accused the Palestinian Authority of encouraging terrorism and militant activity by publicly honoring attackers and by paying stipends to their families if they are killed or jailed in Israeli prisons.

Labor head Merav Michaeli reportedly told the cabinet that the Palestinian Authority was prepared to halt these payments, which are not only deeply unpopular in Israel but also in the United States and Europe, who see them as incentivizing terror.

“I know that the PA is ready to stop the payments to terrorists and their families, so we can stop with these offsetting measures,” Michaeli said, according to an unsourced Channel 13 report.

Alternate Prime Minister Naftali Bennett fired back: “If they want to stop the payments, they should stop. There’s nothing to talk about.”

Michaeli insisted that they were ready but that such a move on the PA’s part was contingent on peace talks.

“I know they are ready. We need to have diplomatic talks with them, and this would be part of it,” she reportedly said.

The cabinet’s decision immediately drew criticism from Palestinian officials, calling it a “financial blockade” on the Palestinian economy. PA officials have similarly railed against this Israeli policy in the past.

“The occupation government continues with its money piracy over the Palestinians’ funds and decides to deduct hundreds of millions of shekels to further embed the policy of financial blockade and steal our money in a step that adds to the daily…