Money maneuver: Israel stops funds to stall Palestinian unity talks

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A classic barrier to constructive peace talks between the Israelis and Palestinians has been the split on the Palestinian side between Fatah, dominant in the West Bank, and Hamas, in power in Gaza.

Talks between the two, capable of healing the divide to a degree prior to Palestinian elections in May, permitting the Palestinians to bring a coordinated position to the peace table, are currently under way in Cairo, surprisingly enough given the level of turmoil in Egypt itself.

Instead of welcoming the development, however, the Israelis are taking punitive action against the Palestinians in response to their unification efforts and to their attempt to achieve a United Nations seat. The Palestinians have already been admitted to membership in the U.N. Educational, Scientific and Cultural Organization, a subordinate U.N. body.

The Israelis have chosen a particularly insidious measure to try to torpedo the Fatah-Hamas reconciliation talks. Some two-thirds of the Palestinian Authority government's revenues come from customs and other tax payments. Unfortunately for the Palestinians, these taxes are collected by the occupying Israelis and, in principle, then remitted to the Palestinians. For nearly four weeks now, to punish the Palestinians and to discourage Fatah and Hamas from resolving their differences, the Israelis have withheld the Palestinians' money.

This has meant that the Palestinian Authority government is nearing collapse for want of cash. If the Israelis do not free the funds, amounting to more than $100 million, by Dec. 1, salaries supporting more than 1 million Palestinians will go unpaid. At that point the Palestinian government will face serious unrest.

Senior U.S. officials and U.N. Secretary General Ban Ki-Moon have pressed Israeli Prime Minister Benjamin Netanyahu to release the Palestinian money. The Israelis have used this tactic before, in the 2001-2002 period and in 2006, when Fatah and Hamas briefly formed a unity government. At those times Arab countries and other donors came to the Palestinians' rescue, making up the shortfall.

If the U.S. government is serious about wanting Israel to stop obstructing the Palestinians' efforts to achieve unity among themselves, clearing the way to direct Israeli-Palestinian talks, it could easily resolve the problem of the withheld funds. America grants Israel $3 billion per year in aid. It could pay the Palestinians their missing $100 million per month, subtracting it from the U.S. aid to Israel, until the Israeli fund blockade stops. That way both sides would understand clearly how much importance America attaches to talks between them and to Middle East peace.


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