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Israel agrees to transfer to Norway frozen PA funds earmarked for Gaza

The deal is meant to keep the money out of Hamas's hands while also reducing U.S. pressure on Jerusalem.

Prime Minister Benjamin Netanyahu convenes the Security Cabinet at the Kirya military headquarters in Tel Aviv after the surprise attack by Hamas, Oct. 7, 2023. Photo by Haim Zach/GPO.
Prime Minister Benjamin Netanyahu convenes the Security Cabinet at the Kirya military headquarters in Tel Aviv after the surprise attack by Hamas, Oct. 7, 2023. Photo by Haim Zach/GPO.

Israel’s Security Cabinet on Sunday approved a decision to freeze funds from reaching the Palestinian Authority that the latter planned to send to the Gaza Strip. Instead, Jerusalem will channel the money to a third party, Norway, for safekeeping.

The decision, which enjoys U.S. backing, prevents Gaza-earmarked funds from reaching the P.A. “under any circumstances” unless approved by the finance minister, the Prime Minister’s Office said in a statement.

Israel’s Finance Ministry collects taxes and customs duties on behalf of the P.A., which it transfers to the entity monthly.

The PMO declined to say whether the P.A. has agreed to accept the remainder of the funds collected on Ramallah’s behalf.

On Nov. 2, although agreeing to send the revenue to the P.A., the Security Cabinet voted to freeze funds equivalent to those the P.A. sends to the Gaza Strip. The decision came at the insistence of Israeli Finance Minister Bezalel Smotrich, because it could end up in the hands of Hamas.

Although Hamas seized control of Gaza from the P.A. in June 2007, Ramallah still makes payments to its employees in Gaza.

The P.A. earmarks an estimated 275 million shekels, or $73 million, for Gaza each month.

The Palestinian Authority Finance Ministry reacted sharply to the decision, announcing in early November it would not accept any tax revenue from Israel unless it received all of it.

“Any reduction in our financial rights or any conditions imposed by Israel that may hinder the Palestinian National Authority from providing for our people in Gaza is rejected by us,” Hussein al-Sheikh, the secretary-general of the PLO Executive Committee, reiterated in a statement on Sunday.

Despite U.S. pressure to transfer the funds, Smotrich remained firm, leading to Sunday’s agreement in which Gaza-earmarked funds would instead be sent monthly to a Norwegian trust account.

The U.S. and Norway respect the Security Cabinet’s proposal, which was formulated by Netanyahu, Smotrich and the Minister for Strategic Affairs Ron Dermer, the Prime Minister’s Office said.

The U.S. will act as guarantor of the agreement, according to the PMO.

In explaining the agreement’s rationale, Channel 12 reported that it takes U.S. pressure off Netanyahu and satisfies Smotrich.

“Not a single shekel will go to Gaza,” Smotrich tweeted on Sunday. “And this time with American backing for the policy that I have been leading from day one.”

The PMO statement noted that “any violation of the agreement” gives the finance minister the right to “immediately freeze” all P.A. assets and triggers the return of all monies in the Norwegian account to Israel.

National Security Minister Itamar Ben-Gvir cast the sole vote against the decision. He tweeted on Sunday, “Unfortunately, Prime Minister Benjamin Netanyahu constantly moves the red line. … Even on the right, there are those who are still influenced by the konceptzia [governing asssumption] including that ‘good solutions come from Norway.'”

Though underreported, the government’s November decision to pay the P.A. a portion of its taxes included that amount the P.A. devotes to its “pay-for-slay” program to reward jailed terrorists and their families for carrying out attacks on Jews.

Since Hamas’s Oct. 7 massacre, the P.A. has added thousands of Palestinians to its list of people who qualify to receive terror monthly stipends.

P.A. officials announced that 3,550 additional terrorists imprisoned in Israel will receive payouts, according to Palestinian Media Watch.

Of the 3,550 terrorists, 661 are Hamas members from the Gaza Strip.

Shortly after Oct. 7, the P.A. agreed to immediately pay $3 million to the Hamas terrorists who carried out the attack.

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