Palestinians refuse to accept partial tax transfer from Israel

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Ramallah (Reuters) – The Palestinian Authority will not accept a partial transfer of tax revenues from Israel that withholds sums earmarked for administration expenses in Gaza, Palestinian Prime Minister Mohammad Shtayyeh said on Monday.

He said he hoped international pressure would bring a speedy transfer of the funds, which are collected by Israel in areas of the occupied West Bank, and paid to the Palestinian Authority under a longstanding arrangement between the two sides.

Part of the funds go to pay for expenses in Gaza that are still covered by the Palestinian Authority, including the salaries of medical workers and other health and education costs, even though the Islamist movement Hamas controls the blockaded enclave.

This month, the transfers have been held up by Israeli Finance Minister Bezalel Smotrich, who heads one of the hardline nationalist-religious parties in Prime Minister Benjamin Netanyahu’s ruling coalition.

Smotrich has refused to release the full package of funds, saying he will not allow funds to go to Gaza and accusing the Palestinian Authority of supporting the deadly Oct. 7 Hamas attack on Israel which killed around 1,400 people.

Instead he has agreed to a partial transfer of funds that would withhold the $140 million he says goes to Gaza, according to Shtayyeh’s statement.

“I say that this is a political decision aimed at separating Gaza from the West Bank, and we will not allow that,” Shtayyeh said. “Gaza is an integral part of our national fabric and an essential geographical component of the State of Palestine.”

Palestinian officials said Palestinian President Mahmoud Abbas had stressed the need for the funds to be released in full during his meeting with U.S. Secretary of State Antony Blinken on Sunday.

The issue has also caused tension within the Israeli government. Defence Minister Yoav Gallant has called for the funds to be disbursed immediately, saying they are needed to maintain stability in the volatile West Bank, which has seen a surge in violence over the past month.

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