Jerusalem.- Because the West Bank is occupied by Israelis and faces deep economic problems, Israeli officials said Friday that a far-right minister has tentatively agreed to release some funds frozen to the financially troubled Palestinian Authority in exchange for strengthening Israeli deals in the territory.
Bezalel Smotrich, the country’s hardline finance minister, sought to affect the Palestinian Authority, which administers some areas of the West Bank that are under Israeli military rule and believes Israel should rule the territory forever.
He withheld hundreds of millions in funding from the Palestinian Authority and threatened to allow the removal of protection for Israeli banks that have dealings with the Palestinians.
To soften Smotrich, Cabinet ministers agreed in a late-night meeting Thursday to measures that include retroactively authorizing five Israeli settlements in the West Bank that have been built illegally, according to Smotrich’s office and other Israeli officials. who spoke anonymously.
In exchange, Smotrich would agree to release some funds to the Authority and extend the exemption for banks, although he has not announced those measures.
Even if that temporary relief goes through, Smotrich could demand further concessions later.
The details and deadline for legalizing the five points are unclear.
Although most of the international community views Israel’s West Bank settlements as a violation of international law, the sites are illegal under Israeli law, and authorizing them will allow them to grow and expand legally.
As the Israeli military campaign continues in Gaza, an economic crisis is unfolding in parallel in the West Bank, where tens of thousands have lost their jobs due to the war, Palestinian civil servants have not received their full salaries for months and near-daily Israeli raids have disrupted essential travel.
Those measures have alarmed the Biden administration, which wants the Palestinian Authority to continue ruling Gaza after the war.
U.S. officials are also concerned that an economic crisis in the West Bank could spark a wave of violence in the territory, which has seen no mass uprising despite months of deadly Israeli military operations.
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