Israel unfreezes Palestinian Authority tax millions

West warned against punitive measure for Unesco vote to admit Palestinian Territories as a member

Israel is to release millions of dollars in Palestinian tax revenues it had frozen as a punitive sanction for the past month, a move that threatened the Palestinian Authority's ability to pay public sector salaries this week.

Despite the vigorous opposition of hardline foreign minister Avigdor Lieberman, Israel's inner cabinet agreed to pay the $100m (63.56m) due for November, plus a similar amount that had been withheld for October.

Israel had faced calls from the international community to hand over the money, which amounts to about two-thirds of the authority's self-generated revenue. The US secretary of state Hillary Clinton, UN secretary-general Ban Ki-moon, and Middle East envoy Tony Blair were among those demanding release of the funds.

The Israeli measure was taken a month ago after Unesco, the UN educational and cultural agency, decided to admit Palestine as a member.

The money is made up of import duties levied by the authority. Under the terms of the 1993 Oslo accords it is collected and handed over by Israel, which controls almost all access to the West Bank and Gaza.

Palestinian officials had warned that the salaries of 153,000 public servants, including the security forces, and other recurrent bills could not be paid without the revenue. Western diplomats warned that the institutions of the authority were at risk of destabilisation, or even collapse, as a result of the measure, which they argued was not in Israel's interests.

Israel said it would reimpose the measure if the authority took further steps to win international recognition for their state. "In the event that the Palestinian Authority returns to unilateral measures, the transfer of the funds will be re-evaluated," the prime minister's office stated.

Officials also said the inner cabinet's decision would be reviewed in the event of a Palestinian national unity government be! ing form ed between the rival factions of Hamas and Fatah.

There was no immediate comment from the Palestinian Authority, which said it had not been officially informed of the decision.


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