Israel has agreed to begin substantial transfers of tax
revenue to the Palestinian Authority after reaching an
understanding with the US to ensure that the money is not
used for terror. The US applied heavy pressure to release the
remainder of the funds as a way of easing Palestinian
hardship.
Israel has said that it is willing to release the funds but
only when it is convinced that an adequate supervision
mechanism is in place that will assure the money will not
fund terror.
A senior source in the Prime Minister's Office said that the
mechanism was set up at a meeting between Palestinian Finance
Minister Salaam Fayad, Prime Minister's Bureau chief Dov
Weisglass, Foreign Ministry Director-General Avi Gil, Finance
Ministry Director-General Ohad Marani, US Ambassador Dan
Kurtzer, and Maj.-Gen. Amos Gilad, coordinator of government
activities in the territories.
The source said that Israel had long wanted to free up the
funds, but was waiting for the right mechanism to be
created.
The new mechanism will reportedly require the PA to deliver a
list of who is on its payroll to American and European
officials, who will monitor the PA's finances from inside the
PA's Finance Ministry.
Israel froze Palestinian tax revenues shortly after the
outbreak of the violence in September 2000. It began
releasing NIS 210 million -- in three equal installments --
in the summer. The last installment was transferred following
a meeting Fayad attended in Washington last week. The
payments were seen as an attempt to prop up his standing in
the PA.
At this week's cabinet meeting, both Gilad and Attorney-
General Elyakim Rubinstein said money already transferred to
the PA had fallen into the hands of terrorists.
Gilad said it would be a mistake to release more funds into
PA Chairman Yasser Arafat's hands, since he uses the money
either directly or indirectly to fund terrorism.
Rubinstein criticized the government for releasing the funds
without the PA having undergone any real change and without
any real supervision over where the money is going.
Construction and Housing Minister Natan Sharansky, who has
been a vociferous opponent to releasing the funds, said he
was "shocked and appalled" by the understanding and called it
a "march of folly."
"By giving money to prop up Arafat's dictatorship, Israel is
again risking the probability that the funds, as in the past,
will be used to finance terror activities, without any form
of accountability. Where is our sense of logic and decency?
We are fighting a war here and paying our enemy for the
privilege," he said.
The Likud Knesset faction also reacted angrily to the
agreement.
Sharon said that the funds "do not belong" to Israel, but to
the Palestinians and were only collected by Israel.
There has recently been very heavy US pressure on Israel to
refrain from public violence and to make gestures alleviating
the situation of the Palestinians. Israel withdrew its siege
of Arafat's Mukata compound in Ramallah under American
pressure, and suffered severe criticism for an incursion in
Gaza in which 17 Palestinians were reported killed, even
though all but one were fighters.
